Trends in Print Management

The rise and fall of Print Management

The Print management industry sprung up in the 1990’s, and thrived by offering significant benefits to corporate marketers looking to reduce their print spend. However, many believe that the industry’s time has past, and will now decline. White Space White Space

This White Paper, based on MarketingUnity’s observations of their leading Print Management customers and other industry sources, notes what some are doing to survive and thrive.

A (Very!) Brief History

The traditional Print Management sales message provided organisations with clear and compelling arguments. H

The main ones included –

• We can cut your print costs by 20% or more.
• Print buying is an expert job, and non-core to your business. Why build or maintain that expertise when you can use ours?
• We can reduce your head count (or prevent it going up)

This led to strong growth in the print management industry throughout the 1990’s and 2000’s. However, that growth is under threat and some companies are even experiencing decline.

• Amongst the causes are:
• A general decline in print spend worldwide. This is primarily due to the decline in marketing print spend (the main source of Print Management revenue) in favour of digital marketing.
• Customers becoming more ‘savvy’ and demanding. Once the savings achieved during the first outsourcing contract have been achieved, they are demanding increased savings on renewal. These savings are becoming increasingly difficult to achieve.
• The recession led to reduced marketing budgets, some of which have not yet fully recovered. At the same time, various corporate scandals have led to increased regulation and governance, which have increased the demand for checks and controls over how remaining budgets are being spent.
• Increased competition, from
  a) Agencies that were ‘decoupled’ from buying print, but are now fighting back, and
  b) the take up of technology that can automate marketing functions (reducing the expertise and effort needed, and therefore the case for outsourcing)

These factors have been emerging for some time now, so most Print Managers have seen the impending threat developing, and had time to counter it.
One course of action has been to implement cost-saving measures, such as installing technology to streamline procurement and administration processes. This has helped to maintain profits, but not to stem the decline in print spend. Therefore, most PMs have also sought to replace the lost print revenue with alternatives.

Alternative revenue sources.

A natural source of revenue to target, is that which existing Print Managers’ existing customers formerly spent on print, which largely means digital marketing. By definition, that is based heavily on technology, such as Web sites, and email marketing, in contrast to manually-intensive Print buying.

As a result, many print managers have developed technology-based marketing services, such as managed communications and Web-site building, and rebranded their businesses accordingly.
Others have looked further ahead, and attempted to anticipate what marketing services will grow in future, such as those related to the rapidly-accelerating increase in consumer power.

This is not the place to examine that topic in detail, but amongst the main contributory factors fuelling consumer power are the proliferation of ‘smart devices’ and social networks.
Customers now expect the brands they deal with to ‘understand’ them, and send them relevant communications across all the range of channels and devices they use. This presents a huge challenge to marketers.
Just a couple of examples are:

• the effective collection, processing and use of the huge volumes of customer-related data. This is so well identified to have attracted a label – ‘big data’.
• the management of campaigns that must be co-ordinated across multiple channels.

Both of these, and many more, present huge opportunities to print managers that can demonstrate the necessary technologies and accompanying skills.
Of course, competition is fierce, coming from a wide range of agencies and other sources. However, in some respects, Print Management companies have a distinct advantage.

• They have proven expertise in cost-effective procurement. Rightly or wrongly, agencies still have the reputation of using procurement as a way to bolster their profits, rather than save their clients costs.
• They have mature technology which is proven to support and report on that procurement. Much marketing technology for ‘new’ channels, and its developers, have sprung up recently, so are relatively unproven.
• Print Managers have proven project management skills, resulting from the relatively high manual effort involved in buying print. Competitors who have focussed on (for example) email marketing or web sites cannot boast that experience.
• Print Managers, unsurprisingly, understand print. Although print maybe be dismissed by many as ‘yesterdays’ media, it still comprises a significant channel, which is expected to continue. Even Google sees the value of traditional mailshots! Again, ‘new’ agencies cannot claim that knowledge or capability, and few are bothering to develop it.

It is undeniable that technology is able to automate many digital marketing tasks. This therefore gives marketers the ability to do more for themselves, and reduces the case for outsourcing.
However, even there, some print managers have adopted a ‘if you can’t beat them, join them’ approach. This has involved them offering technology themselves, in combination with whatever level of services their client requires – from none at all, to total outsourcing, and anywhere in between.

There are a number of examples of this model being very successful, by giving the corporates the technology they need, but also the expertise and support needed to make it succeed – which can often be seen as not available direct from the developers, especially those of ‘SaaS’ software.

The provision of technology with or without services also removes an issue which is of concern to some organisations comparing outsourcing to insourcing: if the technology is only made available by Print Management companies to their contracted customers, there is inevitably disruption to their business should they not renew contracts, and therefore have to stop using that technology. Foreseeing this disruption can even deter some potential customers from outsourcing at all.

Summary

There is no question that print volumes are in decline in favour or digital marketing, which by definition, can largely be performed by technology. With less need for manual effort, there is less need for outsourcing, which threatens traditional Print Management companies.

As a result, many are building services that address the challenges that accompany digital marketing, such as managing campaigns that combine print with other marketing media such as Web Sites and mobile marketing. Some are even offering to supply marketing technologies, especially those that enable efficient collaboration between corporates and their agencies and outsources. The objective is to generate incremental revenue and customer loyalty to replace the declining revenue from print.