Catalog/Publication Outlook : Preserving a Strong Base

Catalogers and magazine publishers in 2013 faced many of the same challenges as the prior year of finding the right mix of media to deliver information and build their brands. In addition, economic uncertainty and pending postal increases were thrown into the pot to create a stew of questions: How can companies reduce costs without negatively impacting integrated, multi-channel campaigns? How can they make the shift of advertising dollars from print to digital work for them? Is it possible to find a profitable ink-on-paper/digital balance?

Successful publishers and catalogers look at problems like these as opportunities to innovate and stand out from the crowd. But they need creative print and cross-channel services providers to help them.

Printers' reactions to these marketing challenges include a wide range of approaches, such as sophisticated analytics and embracing new print technologies, explains Bruce Jensen, vice president of sales at TC Transcontinental Printing, headquartered in Montreal. His company recently installed an HP T400 continuous-feed color inkjet press, which enables "offset-class capability" and longer runs with 100 percent variable content capabilities. "It's the direction the market is heading," he says.

Interactive Print Solutions

Quad/Graphics, of Sussex, WI, has invested in interactive print solutions to seamlessly connect print and mobile media, like its Actable mobile phone and tablet app. The app and its enabling technologies are all improving faster than the speed of search engines, offering more opportunities as time goes on. "We now say we are a printer and a media channel integrator," says Dave Blais, executive vice president of sales and client services, "because it is clear that the future is not an either/or channel decision, but one that integrates all channels."

Some brands in the magazine sector are continuing to expand internationally, notes Rick Marcoux, president of publishing and commercial services at Chicago-based RR Donnelley. He describes how particular attention is being paid to Latin American and Asian markets. "RR Donnelley is well-positioned for such expansions, owing to our international footprint in Latin America, Europe and Asia. We remain a printer of choice for publishers expanding in these regions," he says.

For instance, a longtime magazine print customer began to extend its reach to readers through a digital edition provided via RR Donnelley's DigiMag product, Marcoux notes. Starting with the replica edition, RR Donnelley currently creates animations, designs interactive videos, offers translations into three languages and provides publications for 15 countries. "We are now converting to mobile apps on both the Apple and Android platforms," he explains.

Although the publishing industry reports declining ad pages and circulation numbers, there were some positive outcomes in 2013, including a slight increase in title launches and fewer shutterings. In any given survey, the results can be interpreted with a "glass half-empty" or "glass half-full" mentality. These executives remain hopeful.

"Many of our magazine clients are reporting increases in page counts and circulation, with print still generating the commanding share of subscription and advertising revenues," Blais remarks.

Transcontinental's Jensen is encouraged by an Association of Magazine Media (MPA) report that indicates print ad revenue increased 1.6 percent through the third quarter. "There's also evidence that some marketers are shifting dollars to print as the novelty of digital advertising disappears," he says. "Far more people ignore digital ads than read them."

Several digital-only publications have also resumed their print versions, according to RR Donnelley's Marcoux. For consumer publications, the trend towards developing high-grossing special editions around celebrations and anniversaries has also helped reduce the loss of newsstand sales in the checkout aisle, he says.

In addition, magazine publishers are continuing to experiment with creative paywalls. "Some have moved to a paywall model rather than an advertising model," Marcoux explains. Others have embraced the "Netflix subscription style," as he calls it. This approach allows readers access to all they can consume for one price.

On the catalog front, there is no better medium than the printed page to deliver a memorable, tactile shopping experience to the reader, contends John Coyle, group president, sales, at RR Donnelley. "Printed catalogs have staying power and, when combined with other features such as fragrances, textured varnish and targeted inserts, they provide a multi-sensory experience that does not end with the content on the page," he says.

Print Still Preferred Medium

Coyle is heartened by a recent Two Sides survey that revealed 70 percent of readers stated a preference for reading print and paper communications rather than pixels on a screen. Sixty-nine percent of that group consisted of 18- to 24-year-olds.

However, an intelligent blend of printed and Web-based marketing approaches can bring about even more sales for catalogers. Coyle points to an article in the U.S. Postal Service's Deliver magazine that reports 163 percent more revenue when Websites are supported by printed catalogs versus Web-only media.

Blais is in agreement. "When used as part of an omnichannel strategy," he says, "catalogs deliver a sampling of products and then encourage the end consumer to take further action online. Unique features such as custom covers, textured varnishes, specialty inks, tipped on cards and personal messages combine to more fully engage the reader and spur response."

For 2014, possible postal increases loom as the biggest challenge for catalog and magazine publishers. "We had been seeing increased circulation and page counts, but the pending exigent rate increase—and ongoing economic uncertainty—seems to have stalled the positive momentum," says Blais, who predicts more prospecting will shift to digital channels like e-mail and banner ads.

In response to looming rate increases, these three printing companies are taking a proactive approach. For example, Joel Quadracci, Quad/Graphics chairman, president and CEO, has testified twice before Congress on reasonable and practical postal reforms. RR Donnelley participates in the national conversation through membership in The Coalition for a 21st Century Postal Service and the Affordable Mail Alliance. And Transcontinental is working with the American Catalog Mailers Association and other industry groups to convince the USPS to hold off on filing the exigency rate case in hopes of true postal reform.

"There's a simple, time-tested rule when it comes to postage increases," Jensen says. "Circulations go down when postage rates go up. This downturn is often further expressed through tendencies to reduce the number of pages or frequency of events."

But the outlook is not totally sour. As the saying goes, if life hands you lemons, make lemonade. In the meantime, Jensen says his company continues to mitigate postage costs through co-mailing distribution, paper alternatives, targeting capabilities and making catalogs more appealing and higher performing.

What they do not do, Jensen emphasizes, is suggest abandoning standards of visual and tactile qualities to cut costs. "Ultra-cheap paper or pages crammed with small type and minimal graphics might reduce distribution costs, but at what price?" he asks. "So, we try to focus all of our recommendations on changes that will help offset mailing and distribution costs, without sacrificing the qualities that make for a compelling reading experience." PI