II. Digital Technology
The role of technology in the transformation of our industry is self evident, and in many ways begs the niche-strategy question. We all have to pick and choose which technology upgrades we’ll spend our precious profits on in order to remain competitive in today’s printing market.

Charles Pesko provides another interesting statistic about our industry: despite consolidation, the digital revolution, and the pricing pressure I just mentioned, print industry revenue is still growing. In fact, between 1997 and 2005, businesses calling themselves “digital printers” accounted for most of this industry’s growth.

This point highlights the widening gap being created by digital technology in our industry. And as that gap between digital adopters and hangers on gets even wider, industry consolidation only accelerates.

One of the digital changes proper to the print industry is a suite of online premedia tools, which many of you are developing. In the age of blackberries and GPS, customers are beginning to take it as a given that if they can track a UPS package at every touch point around the world, they should be able to track their print jobs online. Such a tool will also enable us all to do more targeted printing.

Another key digital innovation is integrated workflow tools to standardize and simplify all processes. This is what big customers are doing. If we also do so, it becomes easier for them to do business with us. Make life easier for your client and they’re more likely to keep you on board, as they have less time to deal with too many suppliers.

But there is another side to this whole digital revolution, the side we read and hear about in the media, precisely where the revolution is unfolding. The emerging digital media environment – begun by the internet and now incorporating cell phones, blackberries, IPODs, specialty digital radio and television channels, and more – has already created, even entrenched, new consumption habits. It is responsible for the emergence of new values that affect both readers and our printing activities.

The widening technology gap in the printing industry is a reflection of – and response to – the much-discussed “digital divide.” Tech-savvy consumers, workers and customers are pulling away from luddites, demanding – and getting – information instantaneously. The old saying that the news is out of date as soon as it is printed used to be a funny, smart-alecky epigram. But just last week the venerable New York Times Company announced that it’s cutting 500 jobs, or 4% of its workforce. The same day, Knight Ridder’s Philadelphia Newspapers Inc. announced 100 job cuts.

This is no laughing matter; this is transformation well under way. In fact, The New York Times Internet segment is growing rapidly. It’s our job as printers to understand how we can be on the winning side of this transformation – to learn how to make digital work for us.

For print customers, digital media are popular because they facilitate ROI measurement and consumer targeting, which were already growing trends in all media and advertising before the digital revolution began in the later ’90s. When Rémi Marcoux, Transcontinental’s founder and now Executive Chairman, came up with the Publi-Sac in 1978, adding colour to retail flyers and distributing them door-to-door bundled together rather than inserted in newspapers, which were on strike at the time, it was a fantastic business solution. Today, distribution of the flyers in our Publi-Sac is targeted down to the city block across Quebec, according to consumer demographics.

The system works well, but online advertising has it much easier. An online newspaper or magazine reader’s automatically recorded mouse clicks are the digital equivalent not just of someone watching them pick up their paper subscription copy off their front porch, but then accompanying them everywhere they take that issue and recording their eye movements across every page they open.

Add in the information gathered through online subscriptions and you’re targeting a lot closer to the mark – not the city block, but the individual consumer, wherever he or she accesses a digital portal – computer or Blackberry.
 
Using this same thinking, advanced database management allows printers to target two or two million individual consumers with direct mail pieces across the continent, then record the demographic information of respondents to the piece one at a time.

The rich ROI data digital media affords is creating two major market trends we can anticipate and prepare for wisely.

Number 1: Increased targeting and specialization naturally creates a multiplication of the number of products being printed, with lower volume for each. More, shorter-run print jobs is where the market is going (e.g. Catalogues: retailers who went Internet are now back printing catalogues).

Number 2: Decreased waste. That means less waste for the customer by printing closer to actual needs, so that they can spend more on the quality of each printed unit within the same budget. For example, typically about 50% of magazines delivered to retail vendors are not purchased, and go to the recycling bin. With better information, we can deliver quantities much closer to a store’s actual needs. The publisher can then put more money into the look of his product rather than wasted volume. This is of course better for the environment, always an important consideration.
 
Knowing these trends, we can see how the digital revolution can be seen not as a threat to our industry, but as complementary to it, and thus an opportunity.

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