Surviving & Thriving in the North American

Printing Industry

CPISC 5th Annual Forum

June 3, 2011

Richard Romano, WhatTheyThink

William Caxton, Printer

1476—First printing press in England; printed first books in English

William Caxton, Entrepreneur

1450–1492—Merchant, businessman, and entrepreneur

Agenda

Where We’ve Been Where We Are Where We’re Going—and Where We Should

Be Going

The Rear View Mirror

Canadian Commercial Printing Shipments—1992–2010

$5,500

$7,500

$9,500

$11,500

$13,500

$15,500

Dec

199

2Ju

ne

1993

Dec

199

3Ju

ne

1994

Dec

199

4Ju

ne

1995

Dec

199

5Ju

ne

1996

Dec

199

6Ju

ne

1997

Dec

199

7Ju

ne

1998

Dec

199

8Ju

ne

1999

Dec

199

9Ju

ne

2000

Dec

200

0Ju

ne

2001

Dec

200

1Ju

ne

2002

Dec

200

2Ju

ne

2003

Dec

200

3Ju

ne

2004

Dec

200

4Ju

ne

2005

Dec

200

5Ju

ne

2006

Dec

200

6Ju

ne

2007

Dec

200

7Ju

ne2

008

Dec

2008

Jun

2009

Dec

200

9Ju

n20

10D

ec20

10

Original Data

Inflation-Adjusted C$

Original Data US$

Inflation-Adjusted US$

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na

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Canadian Commercial Printing Shipments—2006–2010 (C$)

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ata

$0.0

$2,000.0

$4,000.0

$6,000.0

$8,000.0

$10,000.0

$12,000.0

$14,000.0

$16,000.0

Jan 2

006

Mar

200

6

May

200

6

July

200

6

Sep 2

006

Nov 20

06

Jan 2

007

Mar

200

7

May

200

7

July

200

7

Sep 2

007

Nov 20

07

Jan 2

008

Mar

200

8

May

2008

July

2008

Sep 2

008

Nov 20

08

Jan20

09

Mar

2009

May

2009

Jul2

009

Sep 2

009

Nov 20

09

Dec 2

009

Mar

2010

May

2010

Jul2

010

Sep 2

010

Nov201

0

Jan20

11

Jan20

11

U.S. Commercial Printing Shipments—2006–2011 (US$)

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Cen

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f U

.S.

Cen

sus

Bu

reau

da

ta

$0.0

$2,000.0

$4,000.0

$6,000.0

$8,000.0

$10,000.0

$12,000.0

Jan 2

006

Mar

200

6

May

200

6

July

200

6

Sep 2

006

Nov 20

06

Jan 2

007

Mar

200

7

May

200

7

July

200

7

Sep 2

007

Nov 20

07

Jan 2

008

Mar

200

8

May

2008

July

2008

Sep 2

008

Nov 20

08

Jan20

09

Mar

2009

May

2009

Jul2

009

Sep 2

009

Nov 20

09

Jan20

10

Mar

2010

May

2010

Jul2

010

Sep20

10

Nov201

0

Jan20

11

Mar

2011

Canadian Commercial Printing Shipments Forecast to 2017

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Forecast Model

Conservative Aggressive Mean

2011 $8.6 $8.0 $8.3

2012 $8.3 $6.8 $7.6

2013 $8.1 $5.5 $6.8

2014 $7.8 $4.1 $5.9

2015 $7.5 $2.5 $5.0

2016 $7.3 $0.8 $4.0

2017 $7.0 $0.0 $3.5

Forecast in Billions of Inflation-Adjusted $C

Canadian Commercial Printing Establishments—1999–2009

Sta

tistic

s C

an

ada

5,820

4,8434,4864,5474,647

5,0945,0945,2485,3925,4695,670

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Canadian Commercial Printing Establishments by Size

Sta

tistic

s C

an

ada

3,1

22

2,9

47

2,8

62

2,7

91

2,8

43

2,4

73

2,7

81

2,8

15

2,1

55

2,0

48

2,0

81

2,5

42

2,5

09

2,3

96

2,4

00

2,2

14

2,1

83

2,1

34

1,9

72

2,3

39

2,3

59

2,2

74

15

0

20

8

20

5

19

6

18

6

18

3

17

5

16

8

14

6

13

1

12

2

6 6

6 5

5

4

4

8 7

9

9

-

500

1,000

1,500

2,000

2,500

3,000

3,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1–4 employees 5–99 employees

100–499 employees 500+ employees

The View from 20,000 Feet

Current U.S. Business Conditions, 03/11

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20

11

Increased 6%+: 21%

Decreased 6%+: 27%

Top Services Increasing

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Top Services Decreasing

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Top Services Discontinued

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Top Services To Be Added

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Broadband Usage vs. Printing Shipments

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Regression analysis (r-squared = 72%):

for every additional hour of broadband time spent online at home, U.S. commercial printing volume declines by $2.00

In Just Five Years...

2005 No Twitter (launched 2006) Facebook obscure site (launched 2004) No iPhone (launched 2007) No iPad (launched 2010)

In Just Five Years...

2010 106+ million Twitter users 500+ million Facebook users 50+ million iPhones sold 10+ million iPads sold

Media Madness

Traditional Media Spending

Traditional media: Directories, magazines, newspapers, outdoor, radio and TV.

eM

ark

ete

r

Marketing Tactics—Increased Spending in 2011

eM

ark

ete

rStr

on

gM

ail

via

eM

ark

ete

r

What Marketing Was...

What Marketing Has Become...

Social Media

Social Media

Social media passed e-mail in time spent in 2007

According to Facebook: Farmville has 45+ million monthly active users Texas Hold’em Poker has 35+ million monthly

active users Lady Gaga—first person to attract more than

10 million Facebook fans and 10 million Twitter followers

The iPad

This changes everything The Internet as portable as

print, with as comfortable a form factor

All types of content can be accessed virtually anywhere, anytime

New tablet PCs (RIM PlayBook, Samsung Galaxy Tab, etc.) will explode the market

8 Ways the iPad Is Affecting Print

#1.E-books will grow

#2.News apps/“portable Web” will continue to erode newspaper sales/ circulation

#3.Magazine apps provide added value for readers

#4.App development siphons marketing and advertising money

8 Ways the iPad Is Affecting Print

#5.Highly portable device reduce demand for printed documents

#6.Migration of forms and other similar documents

#7.Young users continue to shift media consumption habits

#8.Replace other “stealth” uses of print

Technologies That Will Shape 2020

Faster mobile networks and mobile devices Geolocationary services Augmented reality Cloud computing Embedded chips in goods...and people More and more video [Something we don’t know about today]

Ultimately...

Print is one medium among many Communicators need to use multiple

channels to aggregate a sizable audience Most users are “over-communicated” and

need reminders in multiple media

The Road Ahead

The Road Ahead is Paved Not With Gold but SILVER

Skills Innovation Leadership Vision Enterprise Results

Skills

Skills must constantly change and adapt to the market Production, sales, marketing—yes, and

management Mechanical vs. marketing life of equipment Can employees change with your business?

Look to freelancers/outsourcees? Look at your niches

Specialize but be able to adapt

Innovation

“Creating” rather than “getting” business Develop unique solutions

Digital photo books? Mobile to print? Integration of print and non-print media

Marketing tie-ins with social/mobile media Consistency of brand across channels is

imperative

Leadership

Become an educational resource for customers Communications coach

Help them understand the new rules of communication Social media management? iPad/iPhone app development? What’s next?

Vision

Identify new opportunities Look at the market

Understand how people communicate See all a customer’s marketing/communication

needs Watch new technologies

Have the first new gadget on the block

Enterprise

Create alternate “side” business New initiative doesn’t have to be part of the old one Start as new venture Transition resources as needed Fold the old business if warranted

The industry used to be entrepreneurial Outsource proofing, then bring it in-house Outsource bindery, then bring it in-house

Like it or not, e-media are complements to print

Results

How do you define success? Help your customers become successful and

you will become successful Work with them to define metrics, timeline

Change from project-oriented to process-oriented

20/20 Foresight

Rule #1: There are no rules “Best practices” are fluid

We will be talking about something completely different in 2015

Standards are better R-E-D than dead: Relevance Experimentation Diligence

2020 Foresight

Print’s “Old Guard” had a dismal decade 2011–2020 will see continued upheaval

Traditional markets will shrink to specialties On-demand technologies will be the rule rather

than the exception Widening array of digital communications devices Robust media convenience at low cost

The New Printer Communicator

Is not scared of non-print media Is focused on non-advertising communications Runs shops that are smaller, technology-intensive,

highly productive Readily swaps out equipment, staff to adapt to

market changes Has an emphasis on freelancers, outsourcing, digital

equipment

The New Printer Communicator

Knows that opportunities are many and fleeting Recognizes that digital printing is no protection

against non-print digital media Ignores the process and the medium, and focuses

on the business and the opportunity Knows that printing is not a “race to the bottom” in

terms of offering lowest price Stays away from forecasters, sticks with the

marketplace Knows that their company is not the industry

The New Printer Communicator

Stays ahead of the clients; ignores the competitors Doesn’t let traditions and mismatch of capital with

marketplace limit the ability to implement change Focuses on client’s total communications ROI Forces management into the Gadget Age Stays curious

Questions? Answers?

Thank You Very Much!