SPECIAL REPORT VARIABLE DATA PRINTING -- Methods May Vary

Fall is prime time for professional sports, and many fans are too well acquainted with the sentiment, "Just wait until next year." For years, the same could be said for proponents of variable data printing (VDP). Early adopters of VDP often ended up with a great service in search of a market.

Over time, the Web-to-print business model came to the forefront. It evolved around providing online, template-driven solutions for companies that market through remote agents, dealers and distributors. As the market continues to mature, a growing number of digital printing operations are developing other formulas for success.

Daniels Marketing Support Services, Asheville, NC

Daniels Marketing Support Services has gained a competitive edge by flipping that term around into print-to-Web.

"Our market space has been focused on using variable data printing to drive people to the Web to complete some type of transaction," explains Vaughn Fisher, COO. "We have the graphic arts and IT abilities to develop what we call customized micro-sites, which are a great companion to VDP in that they provide a personalized conduit of information.

The company grew out of a commercial printing operation, Daniels Graphics, and there's also a sister company, Daniels Communications, nearby that is an inbound call center offering fulfillment services, order taking and more.

Fisher says the organization first moved into variable data work in the late 1990s by doing black-only pieces and imprinting of color shells. It has since added an HP Indigo 3050 digital press to do color work and now uses a Kodak Digimaster 9110 for black printing. "We decided on the HP Indigo mainly because its output looked most like offset printing," he notes.

The parent organization's conventional printing operation includes several multicolor sheetfed offset presses. It has developed a specialty in light packaging (non folding) for the textile industry and produces a lot of CD carriers for a local disc replicator.

In the VDP arena, recruiting campaigns for smaller colleges have become a big market for the company. So big, in fact, it established "edu.Marc" as a division of Daniels Graphics to pursue that business.

"Small liberal arts colleges, especially in our market area (the Southeast), have been struggling to attract students," Fisher says. "We've helped several smaller schools do one-to-one campaigns to prospective students and had great results."

Despite the success Daniels has had with micro-Websites, its COO notes one such student recruitment campaign provided a surprising reminder that it's risky to presume what response channel a target audience will prefer.

Given all the talk of how computer savvy and increasingly plugged in the younger generation is today, Fisher says he was sure the majority of responses from prospective students would come in via the Web. Instead, the majority (51 percent) of respondents opted to detach and return the traditional business reply card that was part of the piece.

"We encourage clients to not limit the options they give customers to communicate with them," the company exec says.

Daniels is exploring the potential of Web-to-print technology in one market segment—insurance companies.

"That seems like a great application because of the local agents, but it has been a tough sell," Fisher reveals. It's a complicated sell due to the nature of the relationship between the independent agents and insurance companies, as well as regulatory issues.

On the whole, though, it's becoming easier to sell the service as awareness grows. "Ad agencies are starting to call us," he notes. "When they realize their actions need to be measured and results verified, agencies are going to be a real engine for growth (in VDP). That market is going to be the next big thrust for us."

It will require some finesse, Fisher concedes, since Daniels also offers creative and consultative services, including design and copywriting. "There may be some competitive fear, but we don't do everything an agency does and we're very careful to point that out," he stresses. "We can jump in at any level an agency wants. We can take the lead or go in as a silent partner."

How the company approaches the first meetings with prospects has really changed in the last two years, reveals its COO. "We've gone from saying, 'Look at this mockup' to 'Tell me more about your business and what you want to accomplish.' We've learned we have to ask a lot of questions and get to understand the prospect's business."

To execute this strategy, Daniels' COO says he now looks for salespeople who are marketing oriented. "You must have someone who can go in and make a business case for variable data, and they need to be able to get to the 'C level' (corporate) people," he asserts.

Despite all of VDP's promise, Fisher says it's also important to keep in mind that not all campaigns are successful. "I've turned projects down because I didn't want to have our company painted by a campaign that wasn't going to work," he explains.

Williamson Marketing Services Group, Dallas

Size is probably what sets Williamson Marketing Services Group (WMSG) apart most. As successful as variable data marketing is for 1,000 pieces, there is no reason it can't be done in quantities of a half million or more, asserts Jim Liszewski, president and COO.

"Our business plan is focused on large volume, high-quality pieces. We are really targeting the larger agencies and consumer marketing companies."

WMSG has been in business for four years, originally as part of The Williamson Companies and now as a totally separate company (since March 1, 2005). The Williamson family still has an ownership stake in the spinoff and the two companies continue to service a lot of the same accounts with joint sales activities, Liszewski says.

Early this year, the all-digital operation added three more Kodak Nexpress 2100 digital color presses, bringing its total to six machines. Four full finishing/mailing lines back up those presses, as well as two each of the Kodak Versamark VJ1000, DS5240 and DS6240 ink-jet printing systems. Virtually everything the shop currently produces has some variable component.

WMSG's chief exec describes the business as offering full-service direct marketing services primarily to firms in the financial services, brand-conscious consumer marketing and automotive sectors, as well as to agencies. Most of the staff has a background in data services or direct marketing on the client side, rather than printing.

"Most of what we are doing involves working with the client's CRM (customer relationship management) applications. We do a lot of high level data mining, behavioral modeling and other actions to define content pulls on our output devices," Liszewski says.

The company has only dabbled in Web-to-print applications. "Some days I think we are missing out on that low-hanging fruit, but because of our business plan we are not well positioned to manage short runs. Our operation is built to do hundreds of thousands of pieces a day, including finishing and mailing them," he says.

"There is room for a lot of different models in the market," Liszewski continues. "Our machine horsepower is based on meeting the production peaks, so we can struggle to fill machine time."

He agrees with Fisher's assessment that there is a growing base of VDP experience in the market and increases in demand will be driven by more agencies embracing the technology.

"Many agencies still don't understand it (variable data marketing) and how to position the service," Liszewski contends. They still look at digital printing, to some extent, as decreasing their potential revenue since much of the traditional agency business model revolves around managing clients' print.

"We have seen some agencies take the opposite view and expand their billing opportunities by getting more involved in the data side and digital asset management," he continues. "Such services can easily take the place of the print broker relationship they used to have with clients."

WMSG is experienced at helping clients bridge the gap from not understanding variable data marketing to really implementing it effectively, contends its president. "We understand how agencies work and how to help them."

According to Doug Pershing, vice president, Data & Production Services, clients generally have an overall idea of what they want to do. But, there definitely still is a development phase, he says.

Pershing points out that WMSG is in a position to work with clients at all stages of a project, from conception to design/creative and data preparation then on to final output. He agrees that it's important to be respectful of the agency's role and business relationships.

"We try to convey to agencies that design is their realm and we want them to be in control of it as much as possible," Pershing explains. "We will work with them as much or little as they want us to and function as a support team."

No matter who does the work, Liszewski says a strong commitment to testing is critical to ensure maximum results. "The client must devote sufficient resources to doing a legitimate test of the creative, size, layout, etc. That's a strength of the technology—being able to do testing quickly and in small volumes," he asserts.

Ready availability of client information is making it possible for even small companies to generate the customer profiles, behavioral studies, etc., required to exploit the potential of variable data marketing, Liszewski says. Yet, even factoring in WMSG's success developing a business based on high volumes, he believes the market may still be a couple years away from the true explosion in VDP usage.

What remains to be seen is if the industry can avoid letting the service slip into a commodity status as it attains critical mass, Liszewski cautions.

Marketing Services by Vectra, Columbus, OH

Craig Taylor, president of Marketing Services by Vectra (MSBV), also sees some cause for concern as the pool of VDP providers grows. There is a risk of the printing industry itself commoditizing variable data printing depending on how the service is sold, he says.

"The sales cycle and how to approach it is challenging for a traditional printer," Taylor explains. Many conventional printers and salespeople can best relate to digital printing as a short run four-color or black-and-white process, he says.

MSBV's strategy is to listen for what the customer's real pain is, rather than simply taking what they say at face value, notes its president. "That is just the symptom. You need to understand what the customer's business problem is and offer them a solution."

The company was founded in 1982 as a fulfillment-only operation, and then started adding offset printing presses in 1992. Its conventional capabilities now include a half-size heatset web and several multicolor sheetfed offset presses.

Management made the decision to add digital technology in 2004, starting with a (now Kodak) Digimaster 9110 monochrome system in August and a six-color HP Indigo 3000 digital press in October. This was followed by the installation of a duplicate color machine and a Digimaster 9150 in 2005. The shop also has several wide-format ink-jet printing systems.

All of these capabilities are under one roof and sold by the same staff. That structure represents a change in philosophy on the company president's part, since he first ventured into the digital market 12 years ago as a minority investor in an all-digital printing operation, called Ohio Full Court Press.

"At the time, I didn't think a digital workflow and conventional production could co-exist under the same roof," Taylor recounts. "When the workflow went completely digital on the offset side, it made sense to bring both processes together. So I sold my interest in the other company."

Restaurants, retailers and financial institutions, along with some ad agencies, account for the bulk of the company's work. It also is active in the religious market.

MSBV's digital printing business is based on the more traditional model, if there can be such a thing in a young industry. It is concentrating on variable data applications, which now account for 85 to 90 percent of the work, and has even created a branded variable data marketing program—One-to-One 360°.

Taylor says many of the firm's clients have dealers or distributors who they want to support with flexible marketing tools while still maintaining control of their brands. Thus the need for implementing a Web-based customer interface.

All of the company's services are targeted to more or less the same client base. "We've had success selling additional services to our existing customers," Taylor notes, "or if we've targeted a new company as a variable data prospect, we've been able to then also get traditional work."

MSBV specializes in creating customized, cost-effective marketing solutions for customers ranging from sole proprietorships to the largest of Fortune 500 companies. The common denominator is that they sell high-ticket items and get high value from maintaining regular customer contact.

This profile of best prospects is dictated by the development costs required to launch a campaign, Taylor says. "We use a 'crawl, walk, run approach' with companies that are afraid of the cost to get started. We begin by talking about doing simple tests so they can see the results first-hand."

That means the marketing services firm has to have a way of tracking programs so clients can see how they are working. "We use proprietary software on the back end to report the results," Taylor notes.

The next hurdle to overcome is the quality of the client's data, he says. "Most say they have a lot of data, but they don't know if it is usable or how to extract what is useful. We currently employ four people on the database side and are looking to up that number," reports the company exec.

Before adding in-house creative services last fall, Taylor says he had always been of the opinion that MSBV shouldn't offer design capabilities because of the potential for being perceived as competing with agencies. "I've completely changed my mind on that issue," he notes. "Most of the agencies are not as clued in as we are on the variable side, in terms of what can be done and how to do it in an economical fashion. Having in-house creative has really helped us in the marketplace."

So how does Taylor measure his own company's results to date? "We're having to add more machines," he observes.

—Mark Smith