You need money to make (more) money, the adage goes. Imagine having 10-figure annual sales, as in billions with a “b.” Only eight print-related companies in North America post sales that high, and seven of them now are publicly held. One US-based mega printer’s sales are 11 digits, not counting decimal points. Indeed, firms such as Cenveo, Consolidated Graphics, Deluxe Corp., RR Donnelley, Quad/Graphics, Transcontinental Printing, and Valassis Communications have deep financial resources.
So what’s new with the “big boys” of print? QP reports on the recent partnerships, equipment additions, and new market opportunities that are helping to reshape our industry. Let’s start at the top.
With 2011 sales of more than $10 billion, Chicago-based RR Donnelley (RRD) is far and away the largest print firm in North America and, possibly, the world. Often still referred to as “the Big Indian” because of its one-time Indianhead logo, Donnelley is more like the chief of our industry. All print business owners need cash flow: Donnelley’s operating cash flow, excluding capital expenditures, was up just shy of $700 million last year.
Many printers are envious of the Big Indian’s financial position. With those deep pockets has come more than a hint of arrogance over the years. For example, Donnelley rarely if ever advertises because it doesn’t need to, the firm contends. Repeated voice- and emails to its corporate communications department typically go unanswered. And there are ample stories (many true) about RRD throwing around its considerable weight, using its leverage and economies of scale at contract renewal time. To call the process “negotiation” would be a stretch, insist those holding the short end of the stick.
“We find ourselves benefiting from the economies of our scale and not needing to compete on a one product basis,” CEO Thomas Quinlan told financial analysts during a February conference call discussing the company’s 2011 earnings and performance. As examples, Quinlan cited contracts with Chrysler, IMG, and Office Depot in the US, and the Metro grocery and pharmacy chain in Canada.
Giving credit where credit is due, traditionally Donnelley has reinvested heavily back into the company, spending millions of dollars each year on research and development. While its think tank and number of engineers may not be as large as, say, Kodak’s or Xerox’s stable, keep in mind that this is a printing company and not a vendor/supplier to the industry.
More recently, however, RRD has become an equipment supplier to itself. Notably, in late June it introduced a series of ProteusJet Multiweb digital print applications for direct marketers. That’s right: The Big Indian has designed and built its own digital press platform. The new technology enables credit, telecom/cable, retail, and insurance marketers to better manage one-to-one communications. The integrated piezoelectric, four-color inkjet technology and fully automated mail assembly lines create mailings targeted to the individual needs and interests of millions with precision, speed, and familiarity, Donnelley says.
“Our clients succeed when content connects to deliver the right message precisely and in an impactful way,” notes Mary Lee Schneider, RRD’s chief technology officer. “The ProteusJet Multiweb platform harnesses complex business rules developed by our clients to dictate text and color graphics instantaneously. The production lines allow direct marketers to mount campaigns with versatility and with production efficiencies unattainable in traditional direct mail manufacturing,” Schneider continues. “The downstream dividend of enhanced postal savings is a further testament to the cost efficiencies that are vital to direct marketers.”
The Multiweb production line that houses ProteusJet's piezo imaging units assembles feature-rich mailing pieces in volume with speed, allowing shorter cycle times than traditionally experienced. Daniel Thornton, president of RRD’s Response Marketing Services, states, “Consumers are continuously presented with mass advertising, but our ProteusJet Multiweb lines enable marketers to tailor and present messages precisely to the individual reader in ways that television, radio, and even social media cannot. Using the demography attached to each mailing address, our clients can present variable graphics and visuals that individual readers understand and relate to,” Thornton shares. “Likewise, they can write to the individual in terms that are familiar. Marketers can improve speed to market, deliver more timely offers, and condense countless individual campaigns into one continual run that delivers more efficient postal-ready mail that earns important postage discounts.”
A month earlier, at drupa, RRD and press manufacturer KBA introduced the much-anticipated RotaJET 76. The jointly developed inkjet press is at KBA’s main production facility in Würzburg, Germany. The digital device unites KBA’s knowledge as a market leader in high-quality web offset press engineering with RRD’s expertise and industrial application of its proprietary Apollo inkjet technology—complete with the attendant hardware and workflows.
Looking at more conventional print alternatives, RRD expanded its package printing presence by buying Genesis Packaging & Design 11 months ago. The Lemont, IL, custom packaging firm provides services that include design, printing, diecutting, finishing, and assembly. RRD is transitioning to the digital age in other ways as well. Last summer, it acquired firms that provide a number of software publishing tools that Donnelley can offer to publishers to create new online business models. LibreDigital provides digital replicas of publications and e-reading software, while Sequence Personal’s custom publishing software enables readers to select content to be digitally produced as a specialized publication. Earlier in 2011, Donnelley purchased Journalism Online, which helps media companies generate subscription revenue from their websites. Its Press+ system enables publishers to offer their audiences a blend of free and subscription-based content.
100 Minutes North
Situated about 90 miles due north of Chicago, near Milwaukee’s Lake Michigan shores, is another venerable mega printer. With “only” 24,000 employees, 60 printing plants, and less than half the revenues of Donnelley, Quad/Graphics, based in Sussex, WI, is nonetheless huge, with annual sales of around $4.3 billion. Like Donnelley, Quad also has grown by acquisition, purchasing World Color Press (Quebecor World) for more than $1 billion two years ago. Shortly thereafter, North America’s largest private printer went public, adopting the “QUAD” symbol on the New York Stock Exchange. (Baltimore-based Vertis Communications now holds the title of the largest private print firm, with revenues of $1.2 billion.)
But unlike its largest North American competitor, Quad’s persona seems much more friendly and approachable. It is almost as if founder Harry V. Quadracci’s affable smile somehow is imprinted on the company, 10 years after his tragic drowning. (Were he still alive, “Larry” would be 76 and, no doubt, still donning his trademark bow tie at DMA shows.)
For the past six years, son Joel Quadracci, has been CEO of the printing firm his father founded in 1971. Quad’s management team outbid rival Donnelley to acquire Worldcolor. Mark Angelson, Worldcolor’s then-CEO who had led Donnelley as its chief executive for four years (2003-07), rebuffed his former employer’s offers. (A graphic arts mergers and acquisitions guru, Angelson also had been CEO of Canadian firm Moore Wallace, at one time the third largest printer in America, and now is deputy mayor of Chicago. As the ninth anniversary of the Donnelley-Moore Wallace deal approaches, there still is debate over who actually “acquired” whom. A slew of Canadian executives descended on the Chicago firm in late 2003, yet the Donnelley name was kept in tact, perhaps for recognition and branding purposes.)
More recently, this past June QuadDirect revealed enhancements to its 579,000-square-foot Effingham, IL, direct mail facility. The multimillion-dollar investment in commingling and inline manufacturing equipment is driving greater speed and postal savings for customers, the company reported. The year-long expansion project includes two additional high-speed letter sorters. “Our latest investment in the [Effingham] plant has focused on state-of-the-art inline press personalization, selective inserting, and on-site commingling capabilities” Joel Quadracci says. “The result is a truly 21st century facility with more of the technology direct marketers need to drive greater response while better managing production and distribution costs.”
In the magazine sector, a mobile innovation milestone was achieved this spring as Quad partnered with Wired to produce America’s first microchip-laden magazine advertisement, powered by near-field communication (NFC) technology. The April 2012 print issue featured an ad with an NFC tag that launched a mobile site when tapped by an NFC-enabled Android smartphone. Appearing in 500,000 subscriber copies, this marked the first time the fast-emerging chip technology has been used in an American magazine on a mass scale. “This is a landmark development in the continued redefinition of print and the ways print can be married to innovative technologies to drive greater reader engagement and response,” Quadracci notes.
Chris Pryor, executive director of Quad/Graphics Media Solutions, says applications of the new technology should ramp up quickly as more NFC-enabled smartphones come onto the market and as advertisers discover how to leverage the unique characteristics of NFC. “We now have the ability to help publishers and their advertisers create interactive and highly personalized campaigns that simply require a reader or recipient to place their smartphone on or near the ad to activate,” Pryor adds. “Other applications will involve having the reader take a NFC-enabled advertisement or promotion into a store or dealership, where NFC readers and point-of-sale terminals can activate personalized discounts and other offers.”
Plum of an Idea
A year older than Quad/Graphics, Valassis Communications, with headquarters in Livonia, MI, is a media and marketing services company with 2011 sales of $2.2 billion and some 7,000 “associates” in 28 states and eight countries. Valassis offers unparalleled reach and scale to more than 15,000 advertisers. Its RedPlum newspaper advertising brand delivers value on a weekly basis to more than 100 million shoppers across a multi-media platform—in-home, in-store, and in-motion. Through its digital offering, including redplum.com and save.com, consumers can find compelling national and local deals online.
Earlier this summer, the firm enhanced its digital display network (the Valassis Audience Network) with the acquisition of Brand.net, an online display, video, and mobile advertising platform. With Brand.net, Valassis now enables advertisers to reach and influence consumers on their journey from awareness to action with greater relevance, impact, and results, the company said. Combined with its Audience Network, the components of an expansive network of online and offline data, state-of-the-art ad serving and targeting technology, all come together. “Re-Imagining Reach,” as Valassis calls it, reaches today’s diverse consumers at a scale and accuracy unmatched by others, getting the right message to the right consumer in the right medium at the right time.
“The traditional path to purchase was linear and brought the consumer from awareness to action one step at a time,” points out CEO Rob Mason. “Today, consumers are in control and their media habits are changing at a remarkable rate, which means that clients need to use a mix of media to stay both visible and relevant. That's where Valassis has a proprietary advantage—we deliver targeted print and digital solutions to engage consumers at every point along the path to purchase.”
Houston-based Consolidated Graphics (CGX) may be the king of print firm acquisitions. A big company comprised of a lot of smaller companies, CGX had sales last year of just over $1 billion. With 70 printing businesses strategically located across 27 states, in Toronto and Prague, and a presence in Asia, CGX says it offers an unmatched geographic footprint, unsurpassed capabilities, and unparalleled levels of convenience, efficiency, and service. With locations in or near virtually every major US market, CGX provides service and responsiveness of a local printer enhanced by the economic, geographic, and technological advantages of a large national organization. Consolidated Graphics' vast and technologically advanced sheetfed and web printing capabilities are complemented by the world’s largest integrated digital footprint.
This spring, CGX began partnering with Blurb, the creative publishing and marketing platform, to deliver an integrated print-on-demand workflow using an InDesign plug-in. Using the Publish design-to-print workflow powered by Blurb, CGX customers can design and print high-quality runs of one unit and up, for projects requiring immediate delivery.
The new service, named Publish, utilizes a free Adobe plug-in that allows businesses to extend the use of their preferred design software to become an end-to-end print workflow solution for high-quality publications. The plug-in includes templates for four cover formats, five paper types, and eight trim sizes, including Blurb’s new 8.5x11-inch size, which is exclusive to Publish. Publish also enables designers to complete their projects up to 75 percent faster using Blurb's custom proofing tools, automated pre-flight checks, and the ability to order via credit card from within the interface.
“We’re pleased to join with Blurb to deliver a solution for marketers to deliver key content quickly and efficiently to targeted audiences,” says Aaron Grohs, executive VP of sales and marketing at CGX. “The combination of our expansive sales force and customer base and Blurb’s leading software and high-quality product selections is a win-win for businesses that need quick turnaround on short- to medium-size print runs, without sacrificing quality.”
By allowing orders of a single unit and higher, Publish provides a cost-effective solution for smaller volume projects that require rich production values such as client pitches and presentations, highly customized brochures, commemorative publications, look books, corporate capabilities pieces, portfolios, product or exhibition catalogs, and other limited edition corporate collateral. Businesses have a growing need for smaller, custom print runs to service specific needs on more immediate deadlines. Publish serves this need by delivering high-quality publications using the industry's only digital print-on-demand workflow with independent color management in as little as seven days.
“It used to be that businesses required a big budget, lots of lead time, and a need for thousands of units before they could produce a high-end print piece,” says Eileen Gittins, founder and CEO of Blurb. “Now, with Publish, creative professionals can design and print rich publications with amazing production values in runs as small as one unit—and get them turned around in about a week. Although we have been working closely with businesses for years,” Gittins continues, “taking this capability to scale with Consolidated Graphics is a big deal. We believe this new flexibility will result in an explosion of new and remarkably creative print publications.”
Multichannel “Cloud” Marketing
“For many companies, managing and executing their branded messages across various sales and marketing organizations can be a challenging and expensive endeavor,” says Jeff Allen, director of marketing for Commercial Markets. “Marketers are being asked to show return on investment for every campaign and are contending with a growing number of options that can be used to communicate with an ever more fragmented and localized audience. These new solutions help ensure content is relevant and consistent across all sales and marketing channels,” Allen continues, “while helping balance the corporate need to protect the brand and obtain measurable results with the local market rep’s desire for flexibility and customized content.”
Digital Direct Marketing assists companies in managing and executing targeted, cross-media campaigns that advance their reputation, create sales leads, grow revenue, and build customer insight. It can integrate customer touchpoints, including Web, mobile phones, email, direct mail, and traditional mass media, to allow companies to deliver targeted, personalized communications that attract, retain, and grow their customer base.
Local Marketing can give companies the control and flexibility they need to maintain brand consistency across sales channels while enabling local users to create and deliver personalized communications and sales and marketing collateral. The solution also provides marketers with the peace of mind that their brand standards will be maintained throughout their sales and distribution networks.
Both the Digital Direct and Local Marketing Solutions utilize the company's existing SMARTworks Enterprise Marketing Management platform, which is a cloud-based technology framework that enables asset management, workflow configuration, financial settlement, and user management in the industry’s most secure, scalable environment.
The Magazine Channel
Although smaller in scale, Publishers Press of Shepherdsville, KY, is another innovator. With 1,400 employees, two plants, and sales of approximately $160 million in 2011, the fifth-generation, privatized magazine printer is among the top third or so US printers. It was founded in 1866, making Publishers Press only two years younger than RR Donnelley.
Aggregation applications are based on the ability to customize news and other general interest categories, pulling in articles from a broad mix of sources. Publishers Press is rolling out an aggregation app featuring niche magazine content from its print customers, explains Michael Simon, EVP of sales, whose great-great grandfather founded the company after the Civil War.
Called the Magazine Channel (TMC), the app aggregates licensed content from a variety of special interest categories such as landscaping, travel, hunting/fishing, healthcare and, yes, printing. (B2B publisher Cygnus Business Media, the parent company of Quick Printing, is among the printer’s customers.) The TMC app, which will be available in Web and native versions, will enable users to build personalized collections of articles within each interest category. TMC will include a recommendation and personalization engine being developed through a partnership with K-NFB Reading Technology. TMC also will leverage text mining technology from MarkLogic and Temis. Publishers Press plans to sell targeted advertising for TMC, with revenues shared among content licensees, Simon adds.
Meanwhile, in its Lebonon Junction bindery, near Louisville, the printer is adding a 22,000-book-per-hour Pacesetter saddlestitcher this summer—its 15th finishing system from Goss International. The new postpress solution features six horizontal hoppers and is equipped for selective binding and inkjet personalization. Goss is supplying an FS-22 flying stitcher, HT-22 trimmer, mail table, and BS60 stacker with the system.
“Netting close to the full rated speed, when the job permits, while achieving advanced product personalization, is what distinguishes Pacesetter systems, and our crews have been able to do that consistently with our existing 2200,” says bindery manager Joe Sweeney. “Those stitchers are more than twice as productive as our older stitchers. That, combined with faster makereadies and minimal maintenance requirements, prompted the decision to invest in a third one.”