One-to-one print marketing

Printed one-to-one marketing – or at least the technologies that drive it, personalization and variable data printing – was the hottest thing at Drupa 1996, it was still pretty hot in 2000 and seemed to have slipped into the mainstream in 2004, or had it simply gone off the radar? Now, in 2005, it is sensible to ask what has become of it. Has printed one-to-one marketing fulfilled its promise, is it flourishing or is it just coasting along? Was all the hype justified?

To find out, editors-in-chief of 15 European print magazines that make up Eurographic Press, invited end-users, advertising agencies specialized in this filed, consultants and not least printers from different European countries to discuss this question at a round table event in London on April 28. Eurographic Press had found a generous sponsor in Xerox, a company that with its Docutech and the new iGen3 generates masses of personalized and customized print. To get a good overview of the market, Eurographic Press had insisted that apart from Xerox, users of the other main digital printing systems, such as HP Indigo, were also represented.

In his introduction, John Birkenshaw of PIRA, the British print research institute, pointed out that although digital print has been around for decades in some form or another, it is still used mainly in niche applications, although usually in very valuable ones. Digital print accounts for about 5 % of the total print market, with an annual growth of about 10 to 20%. The strengths of digital printing lie in the fact that it enhances the product and the service and has the ability to reduce costs. In the direct marketing sector, digital print operations can be divided into personalization and customization. Personalization adds the name and address or other features to a standard document, while customization adapts the whole or part of the content to the requirements of the individual recipient. Customization is therefore significantly more complex and powerful. For marketers the advantages are obvious: given the corresponding data, customized marketing can target individuals or groups very precisely and deliver measurable results. Mr Birkenshaw suggested that print one-to-one marketing works best when it is used in combination with other media. As a part of Customer Relationship Management (CRM) digital print provides an ideal instrument, as CRM seeks to develop customer profiles and deals with individuals, which cannot be easily done with blanket (litho-printed) direct mail and encourages digitally printed content. The tools for this approach are already there and they are getting better, with very accurate print software and vastly improved – and still improving – digital printing systems. A successful digital print provider needs to have certain attributes, Mr. Birkenshaw concluded, among them an ultra efficient administration, automated copy workflow, fast response at every stage, sound project management and finishing capabilities, to name but a few.

Not impresses with one-to-one success

The first of the five speakers “from the trenches”, who reported on their personal experience with one-to-one marketing and its performance in their sector, was Per Anders Prabert, managing director of the Swedish Direct Marketing Association SWEDMA. He stated bluntly that he was not impressed with the success of one-to-one marketing. Many companies now have sufficient information about their customers to enable them to use it for one-to-one marketing, but the take-up has been very limited. Although there have been very successful campaigns, which have caused the response rate, which in traditional direct marketing is about 2 to 3 %, to skyrocket, but often the companies, in spite of excellent results do not follow through. In Sweden, Prabert said, traditional campaigns no longer show the results advertisers are used to and that is probably true for many countries. The lifestyle and the expectations of consumers have changed – and people are getting used to customization in just about every media channel. Companies therefore should use high levels of customization and personalization, but they do not seem to do so. Advertising is getting more event driven and less campaign driven. Companies need to develop a continuing dialogue with customers, which they could do even with currently available information, but many fail to do so and waste the information they have. This is not due to a lack of suitable technology. The example of Xerox shows that the technology exists for the most sophisticated applications, it is the will of marketers to use the technology, that is often lacking. Marketing is developing away from large campaigns to many small interactive customer touch-points and customisation is the ideal vehicle to achieve this. Successful agencies now have specialized staff for one-to-one marketing, to add relevance for the customer, which is the key for today's business and profitability. Not all companies have understood this. In the banking and utility sector, statements are an ideal vehicle for contacting customers, as everyone reads statements and invoices and the data for the recipients is known. Instead of using this tool, some companies are encouraging users to move their transactions online – because that is cheaper for them – thus depriving themselves of an ideal channel of communication.

Being emotional helps

Georges Van Nevel of the Belgian direct marketing agency DVN stressed in his talk the importance of an emotional as opposed to a rational approach. He reported that in test campaigns the response to customized mailings, which targeted the rational considerations of recipients was about 2 % while those that targeted emotions achieved a response rate of 87%. Van Nevel estimated, that a traditional mailing received about 30 seconds of attention from the recipient. This attention time can be considerably increased by appealing to the emotions. Another advantage of one-to-one marketing is that it is measurable, although many agencies are reluctant to measure response rates accurately. Van Nevel stressed the importance of looking at return on investment (ROI) instead of at cost only. He thought that the opportunities in digital printing far outweigh the limitations, but many advertising agencies do not understand digital printing. Especially the large, established international agencies are not open for this kind of innovation. In spite of this personalization and customization is growing, but slower than expected.

Customized printing and its complexities

Another voice from the side of the users of digital printing and one-to-one marketing came from Monique Stuut of ANWB Media, a subsidiary of the Dutch automobile association ANWB and the largest publisher of tourist material in the Netherlands. Ms. Stuut gave examples of database publishing with very high ROI, such as directly addressing the 3.8 million monthly membership magazines which are printed on the magazine cover in the order of the postman's delivery route. This leads to great savings in postage, as the postal carrier receives the magazines pre-sorted. Another is the send-out of 3.8 million annual membership cards and an accompanying booklet, which gives only information on the services the member has chosen and not on all that are available. At ANWB, printing and publishing on demand started in 1995 with a holiday guide to France. The response was so great that it overwhelmed the printer and the project was stopped. In 2000 the technical possibilities had improved sufficiently to start again and the operation was divided into printing on demand and publishing on demand. Printing on demand simply prints existing documents in the database, such as any number of tourist information booklets, suggested car, bicycle or walking tours, etc. which are ordered by local tourist offices. Publishing on demand is far more ambitious. One prominent project is a tour guide of France which is ordered through the Internet and which is edited according to the region and the personal preferences of the individual customer. These books are delivered within three to four working days and the customer is informed of the progress of his order by e-mail. After he returns from his journey he receives an e-mail with a follow-up questionnaire to evaluate the usefulness of the book and to make further improvements if necessary. Because of the experience in 1995, the marketing for this service was very low-key and consisted only of banner ads on the ANWB website. The product has been very successful, but as every guide ordered has to appear to be a complete stand-alone publication, although it was assembled from a larger complete data source, much editing needs to go into every book sent out, and as this task cannot be performed by a computer, it is very expensive. ANWB is has now embarked on a content management project, whereby all of the nearly 1000 entities within the company that produce content, produce it in such a way that it can be used for different publications and purposes without the need for extensive reediting. The future for ANWB is to offer their customers the information they need in the form and at the time they need it. For the over 35 year olds that will be books or magazines, but the under 35 year olds have different patterns of information usage, which the company is still struggling to come to grips with. Thy key Ms Stuut said, was meeting the total information needs of the customer. After buying the holiday guide for the exact region of the holiday and after having set off, the customer can use a mobile phone or a laptop to receive information on weather and traffic conditions, entertainment in his holiday location or nearby alternative locations when it rains too much where he is. On his return he is the expert on the region and ANWB asks him about his opinion on the various points the company suggested, in order to update the information for the next user. This approach is entirely focused on the need of the customer, using technology – print or electronic – to serve an end, rather than technology being an end in itself.

Printers need creative thinking

Fraser Church of the British dsi Group, was the first printer to recount his experience with one-to-one marketing. When selling personalized, or even more importantly, customized digital print, it is important to choose to whom to talk to, he said. The normal discussion partner of printers on the customer side is the print buyer, whose main concern is to obtain the lowest possible unit price. He will not be the ideal interlocutor, but the people from the sales and marketing side will be more interested in results and consequently in Return on Investment (ROI). Fraser Church quoted the example of the travel company TUI, which used to give their holiday clients about 17 different pieces of print to go on holiday with, none of them personalized and none specific to their trip. Dsi reduced this to a compact booklet, which included only information specific to the customer and his journey, down to a personalized luggage tag and a section for pre-booking a specific seat on the airplane. Although the direct printing cost of this solution may have been higher, the commercial advantage was enormous, from greater customer satisfaction to a reduction of check-in time at the airport to lowering of mailing cost. Church stressed that dsi was selling not print, but applications and providing the opportunity to do business in a different way. The implication is that items such as compliance documents – statements, invoices, tickets and confirmations – are receiving a marketing function by adding personalized or customized information. Often these items are not dealt with by marketing agencies and a resourceful printer can easily introduce new ideas for one-to-one marketing in non-traditional areas, by developing ideas with sales, marketing and operational people in a client company.

Dr. Rüdiger Schmidt of Bosch-Druck GmbH in Germany talked about very practical issues which may impact on the success of a digital printing operation within a traditional offset printing company. Experience had taught him, that digital production presses need their own dedicated prepress and finishing facilities, as the small quantities coming from a digital press will not receive the same attention as long runs coming off offset presses. Print quality is still a very important means of differentiation in digital printing. As many customers use digital printing for the first time, sub-standard quality will turn them away from digital printing for good. In his company 85 to 90 % of digital printing is still concerned with short runs but variable data printing can be very successful if it is application driven. The market for variable data printing is growing, but only at about the same rate as digital short-run printing, he thought.

A similar solution to that of Fraser Church with just as dramatic cost savings and commercial advantages was developed by the Italian printer Rotomail Italia. Its managing director, Giorgio Albertini, explained that the cruise company Costa Cruises, Rotamail's client, has over 700 000 customers per year, going on different cruises and each needing a large number of different programmes, tickets, etc. Rotomail developed a solution, which gives every customer a single booklet of between 50 to 200 pages with all documents and information the individual needs. These booklets are delivered in 11 different languages. The challenge for Rotomail was not only to print the job but to provide most services necessary for its creation upstream and downstream, such as data processing, digital archiving, high-speed variable colour printing and physical and electronic delivery. These jobs are done by different members of the Rotomail group in which “competence teams” specialize on different aspects, such as document design, etc.

 

Growing, but not very fast

In the following debate, the moderator, Marcus Scott-Taggart of PIRA asked three questions:

Where are we now with regard to one-to-one marketing and why?

Is there a future for print-based one-to-one?

And if yes, what are the mechanics of change?

 

Wiebe Barkey of the agency DM Interface in Holland said that the volume of variable print is in small niches and therefore hard to measure. He thought that in the Netherlands there are about 35 to 40 million pages of variable print direct marketing pieces in contrast to billions of conventionally printed ones. He thought the market share of variable print was about 1 %. Scott Taggart said that in 2003 he had estimated the share of variable data print relative to the total of digital print to be 5 % with an annual growth rate of 10 to 20%, which would make the market share now about 15% of digital print in the UK. There was a general belief among the printers and agency/customer representatives around the table, that variable data printing was growing, but not spectacularly so, that all technical preconditions are in place, even the necessary data exists in customer companies, but neither the knowledge about the possibilities, variable data print offers, nor the creative thinking has yet reached an ignition point. Especially traditional advertising agencies were criticized for being too slow to recognize the advantages of customization and personalization, but is was precisely the ad agencies who need to pay attention, as traditional advertising campaigns are increasingly loosing their power to deliver. Mr. Barkey thought that prices for variable data print have to come down to about half their present level, but others pointed out that although the price may be twice as high as that for litho printing, if the RIO was ten times that, it was well worth the investment. The impetus for using one-to-one should come from the customer and the agency, Fréderic Fabi of Dupli-Print in France thought, and the printer should offer the means to realize their ideas, but there were many other voices that said, that printers themselves can be the catalyst for a change in marketing thinking.

 

In his conclusions Marcus Scott-Taggart emphasized that digital print and variable data print is healthy and growing, and that all customer contacts (even invoices) are valuable marketing opportunities that can be exploited by customized or personalized printing. The relevance of the message is the key to personalization and RIO rather than unit price is the key to selling it to customers.

 

Manfred Goretzki 9/05/2005