Catalog/Publication Outlook : Integrating Print and Online

There's no doubt about it: We live in an omnichannel world. The question is no longer, "which side is winning—print or digital?" but more, "how can we integrate the two?" If catalogers and magazine publishers were looking for the right mix in 2013, their main challenge in 2014 was ensuring a seamless integration between print and the Web.

As a result, more and more catalog and publication printers are changing their focus from solely providing ink-on-paper products to becoming true multi-channel partners.

"To a great extent, the role of the (printed) catalog has evolved to be the messenger or carrier that drives customers to order on the Web," says Tom Benedict, vice president of business development at Arandell Corp., based in Menomonee Falls, WI. In Arandell's experience, more than 70 percent of sales are driven by catalogs. "We also see a higher average order from the catalog, more repeat buyers and a higher amount of orders per customer," he adds.

Many people saw the humorous YouTube video that went viral this year celebrating IKEA's "bookbook" (aka, its 2015 printed catalog). According to Adweek, IKEA prints around 200 million copies of its catalog every year—in 27 languages, no less. Satirically comparing the catalog to a digital product, the video praised the medium's "touch interface" and "eternal battery life," along with pages that "load instantly, with zero lag."

Printed catalogs have staying power, contends John Coyle, group president-sales at RR Donnelley in Chicago. "When combined with interactive features, such as scratch-and-sniff, textured varnishes, QR codes and Augmented Reality, they can provide a multi-sensory experience that goes beyond the content on the page," he observes.

That, in part, is why many printers saw a growing business this year in helping online-only catalogers launch a printed counterpart. Denver-based Publication Printers was one. "Those that chose to go 100 percent digital, in many cases, came right back to printing after seeing a dramatic decline in their sales and response rates," says Kerri Rosenberg-Hallet, director of marketing.

Still, customers require a robust online presence to complete their transactions. When printed catalog recipients are ready to order, or if they want to gather more information such as customer reviews or a product demonstration video, they need to be able to easily find what they require online.

Quad/Graphics in Sussex, WI, expanded its capabilities to support this integrated approach to sales and marketing. Tim Ohnmacht, general manager for publications and catalogs, says that the company invested heavily in photography and video services, content workflow systems and metrics to track campaigns.

In this age of tracking and monitoring, data reinforces the fact that printed catalogs work. Even so, Arandell's Benedict cautions, "Many of our clients are data rich, but knowledge poor."

"Today, no one can afford to mail without a targeted strategy," he continues. As a marketing partner, Arandell educates clients on basic direct marketing principles and breakeven formulas that are necessary for success and profit.

Rising postal rates and increased paper prices have surely made catalogers think twice about print quantities. In Coyle's estimation, at RR Donnelley, more than half of the cost of a printed catalog comes from postage. Some RR Donnelley customers responded by opting for mini-catalogs that mail at the price of standard automated letters.

"In some cases, they are estimated to cut mailing and production costs by one third, yet they can be as effective as larger catalogs in driving customers to specific Websites," Coyle explains.

Overall, the outlook for catalogs remains optimistic. "We have seen some moderation in catalog volume demand in the last year," Quad's Ohnmacht notes. And more recent tracking shows some organic decline in the range of 1-2 percent. "But, you could draw a trend line based on recent years that would show the industry actually moving into positive year-over-year growth," he says.

Trends for Magazines/Publications

When it comes to magazines and publications, an ongoing decline in print advertising continues to plague many publishers. "The audited numbers show a double-digit decline in year-over-year ad pages tracked, which is substantial," continues Ohnmacht.

What that means for publication printers is fundamentally one thing, explains William Gentes, COO and CFO at Lane Press in South Burlington, VT. "They look to us to help them more aggressively manage the cost side of the equation."

Subsequently, printers are appealing to advertisers by offering value-added enhancements, such as blow-in/bind-in cards, lenticular inserts, folded posters, booklets and specialty covers, says Dave Cardona, senior vice president for the magazine group at RR Donnelley. In addition, the usage of QR codes and Augmented Reality can make publications' advertisements interactive.

"We've seen a greatly increased use of specialty inks and coatings, such as fluorescent inks and textured UV coatings, and creative print and finishing treatments, such as diecutting, embossing and distinctive folds," reports Leo Centorami, sales director at Montreal-based TC Transcontinental. Peel-and-reveal techniques, stickers, tip-ons, gatefolds and interactive print can also help increase publishers' ad revenues, as can publishing special editions.

As a result of these efforts, some marketers have recently started to shift their advertising spend back to printed magazines. They are realizing print's efficiency and discovering that it is less crowded than the digital space, Centorami says. "If this trend continues, we foresee 2015 as a year where print magazine advertising spend will, at the very least, hold steady, if not grow marginally," he forecasts.

In the mailbox, publishers aim to save money in a myriad of ways. Although co-mailing is a viable option in the United States, Ward Griffin, president and CEO of The Lowe-Martin Group, based in Ottawa, ON, points out that Canadian companies do not have the same volumes or population density to work with.

"That being said," he continues, "we are seeing a trend where publications of similar demographic appeal may distribute together to share costs, or leverage special events to reach a large, central audience." Griffin says bulk mailing has also become increasingly popular in Canada.

Another bright spot for magazine printers is special interest publications, like cooking titles and regional city magazines, where circulation growth is strong and new startups have appeared. "Self-interest on the part of the reading public is driving this success," explains Tom Ashton, sales manager at Walsworth Publishing in Marceline, MO. Passionate readers will pay a premium for content not readily available anywhere else.

Despite all the challenges, in many cases print revenue still outperforms online and mobile by four to one or more, concludes Quad/Graphics' Ohnmacht. In fact, Quad/Graphics has built a robust business of helping online-only publishers move into print. "Industry leaders (like Quad) are finding ways to grow their business in a tough market." PI