For more than a decade, print service providers (PSPs) have repeatedly heard the same message—the key to survival is to expand your print offerings to include a host of media options backed by a solid marketing strategy. The print volumes of yesteryear are not returning, and expanding services that add value to print and grow volume is the path to ensuring survival and yielding profits. A newly released study from InfoTrends, entitled The Evolution of the Cross-Media Marketing Services Provider, indicates that this message has been delivered and PSPs are taking action.
InfoTrends conducted a research study to understand the current state of the transition to cross-media marketing services, the benefits gained and challenges faced in making the move, best practices learned from early adopters, and organizational modifications required to succeed in offering cross-media marketing services. This research involved a survey of 285 PSPs and 63 in-plant organizations, as well as in-depth interviews with nearly 30 firms that have successfully made the cross-media transition.
One of the overarching trends of our research is that print service providers understand that offering cross-media marketing services is no longer optional and are moving in that direction. Meanwhile, the in-plant market is struggling. Close to 60% of PSPs reported offering cross-media services, compared to only 38% of in-plant respondents. In addition, over 40% of in-plant respondents have no plans to offer cross-media marketing services at all. (See Figure 1 at right.)
The study revealed that successfully moving into cross-media marketing demands new marketing approaches, sales models, pricing strategies, and compensation practices to effectively implement these new value-added capabilities. Firms are tasked with determining the equipment and software investments required for delivering these new services.
Building, buying, and partnering for success
InfoTrends’ interviews revealed that profitable cross-media marketing services providers were pursuing a mix of building, buying, and partnering strategies.
Respondents noted that partnering with another firm offered immediate expertise and access to a variety of additional services, and enabled them to test the waters before investment. At the same time, however, outsourcing services reduced their control over the process. Overall, partnering took on two forms: 1) Establishing a stable of freelance creative service providers to support design, copywriting, and programming that can be assembled on an as-needed basis. 2) Outsourcing data analytics and other functions where needed, backed by the bandwidth of the partnering organization.
Profitable cross-media marketing services providers didn’t add a service in hopes that demand would follow. Instead, the service was added in direct response to client needs.
The Marketing VP of a large Midwest firm offering cross-media marketing services stated, “We are a client solutions-driven organization. We’ve grown [from a small print shop to an operation with multiple facilities] based on our ability to add services and competencies to service clients.”
Amount spent to get started
PSP respondents reported spending an average of $53,100 on cross-media communications software to get started. (See Figure 2 above.)
Pattern of evolution emerges
The study revealed that there is a pattern of evolution occurring in the move from providing print-only services to offering cross-media marketing services. Firms that pioneered variable data printing and mailing services have now transitioned to more complex cross-media marketing services, including multiple media channels, creative services, campaign strategy and management, and data analytics.
The idea is to have a variety of marketing communication tools that can be custom blended into the perfect media mix, based on the individual client’s needs to generate results. The next phase of the evolution is mobile and social media. (InfoTrends will explore best practices for combining mobile technology and print in an upcoming research study entitled Mobile Technology: Making Print Interactive, set for release in November 2011.)
Fierce competition in the traditional printing market will continue to fuel the cross-media evolution. Offering cross-media marketing services enables print service providers to enhance the value of services and create longer term relationships with clients who are less likely to move their business based on a cost difference of a few pennies per printed page.
These services also open new and recurring revenue streams as contented customers come back for more.