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Is a New Type of Printing Industry Emerging?

(August 2003) posted on Wed Aug 13, 2003

I.T. Strategies studies spending on P.O.P., outdoor ads, and wide-format graphics


By Eileen Fritsch

Are we in the midst of a fundamental transformation of the printing business? That's the question I.T. Strategies is attempting to answer in order to help traditional print-industry suppliers rethink their product offerings as commercial printing firms continue to see their revenues drop.

Because much of the work output by commercial printers is related to some form of advertising, I.T. Strategies has been sizing up the markets for different types of printed advertising. I.T. estimates that in 2002 worldwide spending on printed P-O-P graphics hit $44 billion, while worldwide spending on printed outdoor advertising graphics reached $16.7 billion. When The Big Picture spoke with I.T. Strategies' analyst Patti Williams in August, she was still attempting to determine how much is being spent on other printed materials used in marketing and advertising.

When viewed alongside I.T. Strategies report on the retail value of wide-format graphics, these studies of the retail value of different forms of printed advertising may ultimately help commercial printing companies better understand why their traditional print business is unlikely to ever bounce back to "normal" even when the economic recovery is complete.

Williams believes wide-format digital color graphics have slowly but surely been siphoning off business from commercial printers. Screen-printing companies that specialize in P-O-P and retail graphics printing have also missed out on potential opportunities for growth.

Here's why: The first wave of wide-format digital color inkjets was relatively slow, but they made it economically feasible to do three things: 1) output large color graphics in volumes of one or two prints as needed (e.g. for trade-show graphics); 2) sell all types of P-O-P graphics and full-color outdoor signage to smaller businesses that couldn't traditionally afford them; and 3) create new, alternative ways for advertisers to spend their marketing dollars (e.g. on fully wrapped vehicles) The companies who jumped into the wide-format market earlier have capitalized on these capabilities.

According to IT Strategies, the retail value of digitally printed wide-format color graphics in 2002 was $19 billion and could reach $30 billion by 2007. Currently, the largest applications are P-O-P signage and trade-show graphics, but various forms of digitally output outdoor graphics may become increasingly popular now that lower-cost solvent- and mild-solvent inkjets can produce either indoor or outdoor graphics on lower-cost uncoated materials.

Furthermore, Williams believes that the combination of faster machines and the availability of better inks and more printable substrates will make it increasingly likely that digital color printing devices (both inkjet and electrographic) will cut into the significant amount of advertising material that is still printed via conventional means.

In 2002, she estimates that only about 25% of printed P-O-P advertising was output digitally. A variety of conventional printing technologies including screen-printing (46%) and offset (18%) were used for the remainder.

Of the $16.7 billion spent on printed outdoor advertising in 2002, I.T. Strategies estimates that only $2 billion (13%) was output digitally. The remainder was output via screen printing (77%), with small amounts produced via offset and flexo printing.

In other words: As content-managers and brand marketers increasingly learn how to repurpose digital assets for greater customization and localization, ample opportunities exist for digital technologies to cut into the large portion of P-O-P and outdoor advertising graphics still produced via traditional printing.

Williams points out that in the world of conventional printing, each of the five major methods--flexo, offset lithography, screen, gravure, and letterpress"?tends to be best for clearly segmented applications such as documents, labels, packaging, etc. With digital printing technology that isn't necessarily the case. With the right software, substrates, and finishing, a good wide-format inkjet printer can be used to produce everything from labels to wallcoverings. With a combination of inkjet and electrographic printing devices, digitally savvy graphics-communications firms can supply customers with everything from conventional marketing materials to P-O-P and outdoor advertising graphics. (I.T.Strategies: 781-826-0200; www.it-strategies.com)


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