Money and the Digital World

Digital vs. offset: That’s a balance many graphic communications companies are struggling to find as print technology continues its evolution. There have been tremendous steps forward, but questions still remain regarding customer reactions, the long term viability of the technology and the metrics for success. Printers of all sizes are wondering just how far they should pursue the digital trend, and what impact digital technology can and should have on their business model.

To address some of these questions, we asked digital expert and printing industry consultant, Frank McPherson, to join us and printers from across the country for a recent “A Cup O’ Joe” conference call discussion of the digital world. Some 10 years ago, McPherson was one of the first to embrace digital technology, successfully building a digital-only business at his Canadian location. In digital, he saw a creative opportunity to move away from conventional printing trends, expanding into fulfillment, variable data, asset management, Web development and other services. “We were not just a printing company,” McPherson said, “but a marketing company. We didn’t sell ourselves; we marketed.”

This marketing focus is key to anyone entering the digital arena. As McPherson pointed out, printers as a whole have been woefully deficient in this area. “Typically, printers market their list of equipment, how big they are or how much software they have,” McPherson said. “The one thing you have to do is look at how you want to develop your company in the way of sales. You have to produce less to make yourself bigger. The smaller the run you can sell the client to cut their costs, to cut down their inventory…that’s [where] the whole concept with digital print really makes a difference.”

McPherson shared the example of a client who was buying 200,000 brochures a year, then throwing out half of them at year end. By switching to digital with its smaller print runs, he showed them the opportunity to save half their costs. “There are opportunities,” said McPherson. “You are not going to lose the account; you are going to gain more out of the account.”

“Our big issue with going digital vs. offset is that the technology is changing so quickly. I know my press will have value at the end of four to five years. [Digital is] constantly changing faster than the press can change.”

One of the printers on the call had similar success. “In the last couple months, I’m seeing a growth in our digital business as opposed to offset,” she said. “I believe as we get deeper into this depression, as customers find alternate ways of communicating and are successful with that, they will do less offset. Print runs are smaller. Format sizes are changing so they will fit digital capabilities. That’s part of why our digital capabilities are growing. Our customers were once die hard offset, but we’ve shown them a job done on offset vs. digital. Now they’re happy with digital. They see it looks just as good and costs less.”

Another call participant agreed there is a trend toward decreased run lengths. He further noted that we seem to be moving toward a convergence of digital and offset capabilities. Offset “make-readies are getting shorter, their run lengths are getting smaller and they are trying to compete with the copiers. Copiers are conversely trying to get longer run lengths because they can’t compete on the run lengths. They’re converging on each other. The latest, greatest Heidelberg can be ready in seven minutes, 50 sheets. That’s pretty impressive. They can compete with, say, an Indigo.”

That brings us to the cost of purchasing digital vs. offset equipment. One participant noted that, “Our big issue with going digital versus offset is that the technology is changing so quickly. I know my press will have value at the end of four to five years. [Digital is] constantly changing faster than the press itself can change. You have to capture and make money on that digital piece of equipment really quickly. It’s like your computer. Why do I want to get into something that’s going to change so quickly? That’s a hesitation for a printer.”