Thursday, August 24, 2006


A Good Sign for Print Volume?

Key content creation markets employment is up compared to 2005. The latest The Bureau of Labor Statistics reports show these changes in the number of employees for June 2006 compared to last year.

Graphic design employees, +3.8%
Graphic design, production employees only, +7.9%
Advertising agencies employees, +2.6%
Public relations employees, +5.9%

What does this mean? While print's summer is traditionally slow, the season's dog days are usually quite busy for design and advertising shops as they work on communication programs for the Fall, especially for retailers. The recent increase in current dollar commercial printing shipments for May and June correspond with these rises, as they usually do. This implies that content creation is up.

Especially interesting is the nearly +8% rise in graphic design production employees. This, suggests a positive indicator for the rest of the year. But, there's a catch. There is a media shift that is still going on, and many of these jobs are directed toward the production of non-print media. Nonetheless, these give us a reason for guarded optimism about print volumes in the short term. Not that they will increase, but that the steep declines of last year may be behind us. The last time that the number of graphic design production workers was this high was December 2001; the data do not include freelance designers.

In June 2001, the number of graphic design production employees was 62,300, according to the BLS. A year later, it dropped to 51,600 and stayed in that range for the next two years. In 2005, it went up to 53,000, which historically would have been a sign that the printing market would improve. Unfortunately, it was a false signal. This year, it's up to 57,200, and is twice the rate of real economic growth. Therefore, we have cautious optimism for print in case we get statistically snookered again.

Printing employment, however, is down about 8,000 jobs, a -1.3% decline. The shift of jobs from printing production to creative markets is a long term trend, and it is continuing. It's not the impact of the Internet though: this remains the effects of desktop publishing still rippling through the industry more than 15 years after it started. A reason for the decline in jobs in any market can often be attributed to increased productivity. The latest indicators we have imply that productivity in the printing industry is still unsatisfactory, and may have gotten worse, because good pricing is still difficult to achieve. The decline in jobs is more attributable to the decline in print volume. Since mid-2000, when print volume was at its most recent peak, printing employment went from 809,000 to 640,200, using BLS data, a decline of 168,800 jobs. The rate of decline roughly approximates the decline in commercial printing shipments in that period.

Productivity enhancement is our industry's biggest economic need. A bottom-up restructuring, involving major investments in computer technologies, as well as more efficient equipment is essential, all with a vision of a building a new role for print in a dynamic, and global, media market. These are not times for making small incremental changes in business operations, but for insightful revolutions that go well beyond the shop floor, with an eye toward what the industry looks like five or more years from now, not just what it will look like next week.

Thursday, August 17, 2006


Electronic Documents Growing... and Growing... and Growing

Last February, we ran a Google search to estimate the number of Adobe Acrobat PDF files that are available on the Internet. At the time, there were 315 million URLs that ended with the address ".pdf". Just six months later, that same search identified 684 million of them.

While this is not a perfect way of determining how many documents are on line, it is still quite informative. The popular use of the Internet may be just 11 years old, but this indicates that it's still bulking up on its way to teenagerhood.

What does this mean to the printing industry? It manifests itself in many ways. While many of these documents would never have been printed by a commercial printer, many of them would have been. The benefit to the content creator is that their initial print order can be smaller, and any need for reprints can be diverted to digital presses or to people's desks; that is, if the documents need to be printed at all.

The other aspect is an opportunity. As printers, and as computer users, how many times have we encountered poorly-made PDFs? When printers receive documents, especially on disk or by e-mail, they should ask if the client needs a PDF, and for what circumstances. These files can be optimized for the intended use, from posting on a web site, to being available as an e-mail attachment.

Sophisticated print buyers and content creators generally know the ins-and-outs of PDF creation because they use them in their workflow for proofing and job submission. Unsophisticated print buyers, especially small business owners, do not. It's not likely that they even think of the idea. Even consumers bringing resumes in for printing can use a PDF of their file for e-mailing to prospective employers. Do printers bring this to their attention? Probably not.

The job of shaping print users' perspectives that printers can be partners in their communications efforts often starts with simple ideas like this.

Thursday, August 03, 2006


The Rise of Direct Mail Shows Change in the Use of Print

The discussion of the increased use of direct mail has been common in recent years, especially as a source of growth for print service providers. This week, we focus on the present state of direct mail cards as tracked by the US Postal Service. The chart above shows the change in the weight of items mailed in the US Postal Service through this past March. The line with the upward trend is direct mail presorted post cards; the bottom line is periodicals. This direct mail trend line started to move strongly upward when the economy began its expansion in mid-2003.

Periodicals have not grown at all; while it seems from other data that the number of magazines mailed has increased, their reduced page counts and circulations have netted out to basically zero in terms of total weight that has gone through the postal system. Lighter weight papers, changes in size, are literally, just around the edges. If periodical shipments were to keep up with the economy's real growth, they should be back up at the 100 line or above. This is not the case, nor is it the long term forecast.

Why is direct mail growing? One of the factors is the growth in the number of small businesses. The latest measure, based on Bureau of Labor Statistics data that we analyze every month, there are now an average of 81,000 net new businesses (births minus closures) every month. Any wonder why Staples has been a solid performer among retailers? Or why Vistaprint continues to grow its business producing supposedly unprofitable specialty items like the most mundane business cards? Or why Staples is investing in its copy shop operations?

At the heart of the rise in direct mail has been the shift to e-commerce. We already have discussed in a prior issue how the rise of e-commerce correlates with very high statistical reliability the decline in commercial printing shipments. Direct mail, however, is being used to stimulate e-commerce use. On one hand, magazine advertising, catalog printing, and other print products have been negatively affected by the e-commerce growth. Yet, direct mail offers a reliable way to cut through communications clutter and get into peoples' homes for what the USPS has described as "the mail moment."

The global consulting firm McKinsey has recently reported that there is a shortage of advertising opportunities in electronic media. Advertisers cannot find enough reliable properties at this time on which to place their banner ads or in other e-media formats. E-marketing campaigns are still hindered by deliverability issues. These will change, of course. But there is no shortage of direct mail applications, and there won't be for some time, representing a continued, significant opportunity for print service providers. Direct mail does not have to be complex. A well-designed post card alone with a compelling offer encourages recipients to remember a brand or to visit a web site. Print has always been about creating conditions for action. With that in mind, we need to do put ideas for action in clients, and our own, minds.

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