Dr Joe's Printing Industry Blog

February 2005 printing shipments were up by $23 million compared to February 2004. But don't get too excited.

January's shipments were revised down, but were still up by $156 million compared to January 2004. For the first two months, shipments are up by +1.2%.

Inflation-adjusted shipments are down, however, by -1.7%, or by -$256 million for the first two months of 2005.

I've been getting the sense that we've hit bottom temporarily and will have a bumpy ride sideways here. I seem to have cause a stir yesterday when I said that 2007 was our next serious challenge, as lots of factors seem to be coming together at that point. I'll be writing about it in upcoming WTT columns, so stay tuned.

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Computing is supposed to make us more efficient, more productive, and generally happier. There was a great article today in the Seattle Post-Intelligencer http://seattlepi.nwsource.com/business/217802_grammar28.asp about how Word's grammar checker is certainly below acceptable. I rarely use it, and when I do it's just for a rough first pass (I actually prefer dumping text into WordPerfect because its thesaurus is always running in a toolbar).

All of us who write for all or part of our living have had adventures in all types of grammar checking software. I was a user way back when RightWriter and Grammatik were available only in DOS, and I have the scars to prove it.

Inspired by the article, I tested this sentence, with some interesting results: The quick brownly fox jumpeded over the lazie back dog's.
Lotus Word Pro: no grammar problems detected.
WordPerfect: The quick brown ly fox jumped over the laze back dog's.
StarOffice/OpenOffice: no grammar checker.
MS Word XP: The quick brown fox jumped over the lazy back dogs. (not so bad, considering, and the MS folks can say that their delivered superior performance compared to their weak and substandard competitors)

The article did remind me of a newspaper headline from the TV show Police Squad with Leslie Nielsen: "Dyslexia Found Cure". I think it would pass through every checker without detection.

One day, grammar checking software will be nearly flawless. By then, my voice wreck ignition software will work real good, too.

Another entertaining article about grammar hit the Associated Press yesterday: http://www.billingsgazette.com/index.php?id=1&display=rednews/2005/03/28/build/state/65-apostrophe-society.inc

Publishing consultant Bob Sacks brought this article to my attention. It's about reading using some of the newest cell phones as readers. It's in Japan, and has yet to hit these shores.
http://www.wired.com/news/gizmos/0,1452,66950,00.html

Then again, there are people trying to turn Apple iPods into readers http://www.ambience.sk/ipod-ebook-creator/ipod-book-notes-text-conversion.php

Many people know I collect radio programs from the 30s, 40s, and 50s, so I found this WSJ article about adding sound effects and music to audio books quite amusing from that perspective. A couple of things were funny from a tech perspective: how this biz is still fighting with standards, and how there was no mention of cell phones. You know that music is being sold for listening on feature-packed cell phones, and audio books will be there too. (Wall Street Journal, subscription required)
http://online.wsj.com/article/0,,SB111171476683889453-search,00.html?collection=wsjie%2F30day&vql_string=Turn+Up+the+Volumes%3Cin%3E%28article%2Dbody%29

Advertising Age is celebrating its 75th anniversary, and has published a brief article about it at http://adage.com/news.cms?newsId=44645 and another article lists the top 75 events of that time
http://www.adage.com/news.cms?newsId=44637

Newspapers are trying blogging http://www.washingtonpost.com/wp-dyn/articles/A6106-2005Mar28.html?nav=headlines , and the article has this marvelous quote: "It's important for newspapers to try dangerous experiments." Um, I thing the experiment started without them. But with a newspaper reporting this newspaper experiment, we should not be surprised that they discovered a whole world that's been going on right under their noses, and may claim soon, that they started it. It's only dangerous because it undermines their business, and it's more dangerous not to be in it.

This past week I've gotten two e-mail promotions from them. One was kind of neat: it had an image of my business card (now, how could I have gotten rid of the ones I just got so quickly? I think I've used four of them, and one of them was to write down a note)

Today, you'll be happy to know that I'm a "select" customer... at least for the next four days, as I got an offer for personalized address labels, note cards, and sports magnets. So unless I act now, or in the next four days, they will "de-select" me, I guess. But somehow, I think they'll find a way to love me and select me again.

The whole thing just strikes me as way too much. It's been two or three promo e-mails a week since I ordered my cards. Yet, I don't remember a "did your cards arrive okay?" contact, or an e-mail about whether or not the order lived up to my expectations. or even a "tell us more about you... perhaps we can show you ways to grow your business..." which might actually double or triple my business card use (I could have used a whole dozen by now!). I can think of some neat things for them, like a virtual card swap, or signing up for a program that would allow businesses looking for my services to easily find me and e-mail or allow them to download my card. There's two things... I can come up with more.

I did get a Vistaprint card from someone the other day. Business must be tough for this person, because he didn't pay the extra $10 to not have them print their ad on the back of the "free*" card. Oh, by the way, the e-mail that provoked this posting... those products were "free*" too.

The Wall Street Journal had a great graphic on oil prices today at http://online.wsj.com/documents/info-oil0503_frset.html

Remember the previous WSJ article cited below (this is a new link to it) http://online.wsj.com/article/0,,SB111024275947372968-search,00.html?collection=wsjie%2F30day&vql_string=Retooling+%3Cin%3E%28article%2Dbody%29 that showed that the oil used to produce a BTU (British Thermal Unit) has dropped by 55% since 1973 (from looking at the chart in the article it's about 40% less oil to produce a BTU since the highest inflation-adjusted oil price of 1980).

With that as the case, to duplicate the economic impact today of the high price per barrel of oil from 1980, it would have to reach not $90, but closer to $150!

The problem is not the price of oil, the problem is short memories and the lack of business plans to deal with such contingencies. I'm really tired of the misreporting by the press about these things, claiming that these are the "highest prices ever." Balderdash, I say. Some real reporting instead of unquestioned acceptance of press releases might be refreshing on this topic. Do we have a budding oil crisis or do we have persistent poor news reporting?

Kindest inflation-and-productivity-adjusted regards,
Dr Joe

An article about the study I collaborated on about offshore printing has been posted on the Printing Impressions web site:
http://www.piworld.com/doc/283405524795624.bsp

It's also mentioned in Katherine O'Brien's editorial in American Printer:
http://americanprinter.com/mag/offshore_overcapacity_0305/

Her column includes that great quote by consultant Bob Rosen:
"God must truly love printers. Why else would He have made so many of them?"

A study by Return Path shows that e-mails are being blocked on purpose or inadvertently by ISPs filtering for spam. Here's the story http://directmag.com/news/ISPs-031705/

This is the press release:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050323005043&newsLang=en

This is a release about the topic from 2004: http://www.returnpath.biz/aboutus/newsroom/press/release.php?id=19

Here are some highlights with comments in brackets:
-- ISPs block 22% of permission-based e-mail [Did you get that? this is "opt-in" e-mail, and it's still being blocked]
-- Blocking for each campaign varied from a low of 1% to a high of 57%. [What if the post office said "we'll deliver somewhere between 43% to 99% of your mail"?; remember, if someone's postal address changes, the post office forwards their first class and some other classes of mail, but e-mail just bounces!]
-- Blocking rates varied widely by ISP from a low of 5% to a high of 36% [Earthlink was the best performer; among the dial-ups they seem to have the best spam engine in terms of detection and discernment]

A key part of marketing competition is to focus on weak points of competitors. Print, when mailed, gets delivered more than 99% of the time. It's important to pound away at that to marketers that new media has this serious weak point, and that print has to be part of their media mix, often for no better reason than this. It's better to act now, because e-mail problems are being attacked and its delivery will improve.

Like the Barrons article I mentioned previously, printers who do not see and learn from what Vistaprint is doing are making a mistake. Not that companies have to be like them, as each company needs to determine what will best serve their target audience, but that Vistaprint is doing things that others failed at (iprint.com, imagex.com in their original incarnations), and that the company is still learning.

Vistaprint's constant testing of concepts is a tradition of direct marketing, even back when it was called direct mail, and fabled copywriter John Caples (1900-1990) wrote the headline "They laughed when I sat down at the piano, but when I started to play..." which sold a home study music course. ( http://www.caples.org/about.html and also http://adage.com/century/people/people021.html and you can see a picture of the original ad at http://historyproject.ucdavis.edu/imageapp.php?Major=AD&Minor=T&SlideNum=32.00)

Vistaprint's market testing is profiled at http://www.marketingsherpa.com/sample.cfm?contentID=2943 Caples was a proponent of testing from early in his career. Testing means that things will go wrong. But unlike many company managements, companies that believe in failure, yes, failure, learn more than others. Vistaprint looks like it's working in that tradition. Samples can be viewed at http://www.marketingsherpa.com/vistaprint/study.html

I was chatting with a fellow baseball aficionado about what a bunch of losers certain pitchers were, Cy Young being the biggest loser in baseball history (315), who also holds the record for most wins (511). Most people forget that Babe Ruth, greatest home run hitter of his era (714), who preferred beer and whiskey and not steroids and would recommend the same today, also held the record for striking out (1,330). Too many executives put their companies on tightropes: where there is no expertimentation, there are no successes, only stagnation. Tom Peters has long been encouraging companies to "fail small." That is, to create situations where new things are tried and then incrementally built upon. A benefit of the Internet is that you can fail quickly and small, and when you have success in an experimental approach, you can implement quickly as well.

Vistaprint is in the news today because it has opened new web sites. No, not new plants, not new sales offices, but new web sites. My, how things have changed. http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050316005421&newsLang=en

Will Vistaprint succeed in the long run? I don't know. But it's another example of people from outside the printing business who don't know what you're not supposed to do, and then break new ground.

McKinsey Quarterly, published by the legendary consulting firm, has an article about mergers and acquisitions that all should read at http://www.mckinseyquarterly.com/newsletters/chartfocus/2005_03.htm The full article requires a "guess pass" or a subscription, and can be accessed at http://www.mckinseyquarterly.com/article_page.aspx?ar=1402&L2=5&L3=4&srid=63&gp=1

Mergers and acquisitions have long been known to be risky; years ago Harvard's Michael Porter was involved in a study that showed only about half work out. This McKinsey article identifies key problems with overestimating of savings from synergies and underestimation of costs of integration. Too often, mergers are done because "Wall Street likes it." But the subtleties get them: the marketplace keeps changing while management's attention is diverted by the legal and negotiating machinations, and company operations become paralyzed as projects are put on hold and spending stops to "make the financial results look good." It's often at this time that management's indecision and lack of clarity about who'll stay and who'll go as they reach for synergies leads to the best people going and the people who don't have marketable capabilities staying, obviously an undesired consequence.

It was someone's Mom may have been the wisest of them all, who, without Excel spreadsheets and masters degrees in finance, somehow knew enough to say "things take twice as long and cost twice as much." Somehow, when I gave clients that kind of budgetary advice they'd politely ask me to leave; but somehow I was always able to get an audience with the new managers who replaced them. :)

USA Today had an article about a the Project for Excellence in Journalism’s State of the Media 2005 report http://www.usatoday.com/life/columnist/mediamix/2005-03-13-media-mix_x.htm . The report can be accessed at this address http://www.stateofthemedia.org/2005/index.asp . Interestingly, it is not available in hard copy and can only be accessed online. Some of the sections are just excellent, especially the economics chapters for each of the media. It is a superb resource, and I recommend permanently bookmarking it because I’m sure you'll want to access it often for a variety of applications.

An excellent article in the 3/14 New York Times titled "Can Papers End the Free Ride Online?" http://www.nytimes.com/2005/03/14/business/media/14paper.html? discusses the difficult transitions newspapers have ahead of them as print fades and digital grows. One of the more interesting quotes is "Print is going the way it's going, which is down, which is unfortunate because it's the revenue engine that keeps this whole thing going. The online business model won't ever be able to support the whole news infrastructure." There will be a time when the whole foundation of publishing companies will be undermined significantly.

Related to that is an excellent commentary from Barrons about how difficult it is for industries to transition, and how they underestimate the new competition, then underestimate the costs of adapting, until it finally hits home, often too late. (Get the link now before it dies this coming Saturday– I’ll try to update it to the new link they assign if I can) http://online.barrons.com/article/SB111058586661977576.html?mod=b_this_weeks_magazine_main

This is funny, but I’m using it to make a point. There are some who use the word convergence to make it seem like technologies converge on their own. In reality, technologies split markets apart, and strangely enough people, yes people, make decisions about what technologies might offer benefits to a target audience. That is, a palette is a better description of how people choose what technologies to use, almost like a chef decides what belongs in a recipe. Those technologies change over time, just like the popularity of certain foods and spices changes with the times.

Here’s the link (you may need to subscribe-- but it's free) : http://www.latimes.com/sports/la-sp-dogbowling13mar13,1,4005825.story?coll=la-headlines-sports

Sometimes these decisions can be bad . . . very bad . . . and while I admire the innovation for the product described in the article, it almost seems to be a crime against nature, something that should be shunned . . . The product in the article is not one of convergence at all, and it illustrates how people choose what technologies they want to apply to create benefits directed to a target audience. "Convergence" the way it is used is "Wall Street analyst talk," the kind that got us into trouble in the creation of the Internet bubble.

Advertising Age had an interesting article about the technology averse. This article is clear demonstration of the fragmentation effects of technology on media (and further undermining of the convergence myth). The volume of alternatives people have and the fact that people have preferences for different sets of benefits (remember, in marketing, a product is conceptual, and is defined as "a bundle of benefits"), and that technologies do not move in lockstep with each other, results is significant portions of a marketplace that do not adopt, or only partially adopt technologies. Some of this is price related (microwave ovens is a good example, from $100,000 in 1950 to less than $100 today), and socially related (more women working created demand for convenience offerings, such as family plan cell phones, household gadgets, like microwaves, and time-shifting capabilities like vcr's, fast food and near-fast dining, and personal services that allow near-24/7 access, as the nature of family life changed).

So the chances of being a luddite (or a conscientious objector to technology) is greater than ever-- because there are more technologies to choose from than ever. But here's the importance of this article and concept: the media mix lives. In that sense this is not an important article at all-- consumer attention has been diverted greatly, and marketers have already shifted and reallocated dollars. what someone could come away with from this article is that there may be people who never use new technology, so therefore creating a "bottom" or "foundation" to the fall that traditional media (or the arrogant phrase "legacy media") have. The article is at http://adage.com/news.cms?newsId=44459

An explanation about how oil prices have not translated into rampant inflation was found in The Wall Street Journal today. Here' s the link, subscription required http://online.wsj.com/article/0,,SB111024275947372968,00.html?mod=mostpop . If you really want to see it and don't have a subscription, send me an e-mail and I can forward it. It discusses how much more efficient energy use has become, and how other productivity initiatives have cushioned the blow. The article also includes a reminder that to reach the highest oil price we have seen in the U.S. in 1980, today's price would have to reach $90. While oil prices will be relatively high in the short term, it's not likely to get that high unless there is an incredibly catastrophic global event. Economist Larry Kudlow had an interesting post on his blog about this http://www.blogger.com/email-post.g?blogID=8718945&postID=111031125677814383

McKinsey had an excellent article on trade and jobs, which can be accessed at http://www.mckinseyquarterly.com/article_page.aspx?ar=1559&L2=19&L3=67&srid=27&gp=0

January printing shipments were $7.5 billion. This was +$238 million compared to January 2004, flat on an inflation-adjusted basis and about 3% less on an inflation adjusted basis compared to January 2003. I will be providing further analysis in my WhatTheyThink column next week.

There was a mixed unemployment report today. Those who watch the payroll survey were thrilled with the upward January revision and the 262,000 new payroll jobs in February. The household survey, however, was down -97,000 jobs. The unemployment rate went up to 5.4% because more people have been encouraged to look for work. That increases the size of the potential labor force (the denominator of the equation), which also helped the rate rise. It is not uncommon to see unemployment rates rise temporarily when employment prospects (as indicated in the ISM reports) are improving.

I'll discuss all these in detail in next Friday's WTT column.

... and he continues: "... get over it." Gee, thanks. And people call me "Dr. Doom."

The quote is in a Washington Post article that can be accessed at http://www.centredaily.com/mld/centredaily/business/11003199.htm . It begins with "The venerable newspaper is in trouble. Under sustained assault from cable television, the Internet, all-news radio and lifestyles so busy they leave little time for the daily paper, the industry is struggling to remake itself.
Papers are conducting exhaustive surveys to find out what readers want. They are launching new sections, beefing up Web sites and spinning off free community papers and commuter giveaways in hopes of widening their audience. They even are trying to change the very language of the industry, asking advertisers and investors to dwell less on 'circulation' -- how many papers are sold -- and more on 'readership,' or the number of people exposed to a paper's journalism wherever it appears, in print, on the Web or over the air.
The changes come as circulation totals have eroded steadily for nearly two decades and as newspapers no longer play the central role in daily life they once did. Newspaper executives argue that an emphasis on readership better reflects what newspaper companies are becoming -- multidimensional media conglomerates with growing Internet sites and stakes in television, radio, magazines and other businesses."

There are a few things that worry me here. First, though I made my living as a researcher, I knew the limitations of research. Doing research on what readers want can often lead to mundane, boring products. When Columbia Pictures was owned by Coca-Cola, they attempted to do research about what movies people wanted, with disastrous results. Shortly thereafter, Kevin Costner's "Dances with Wolves" became a big success. What moviegoer would have told a researcher "I want a movie that's longer than normal, with subtitles, about depressing events around settlers moving west and trampling native American lands. And stick killing Custer in there, too." No movie research would have uncovered last year's "Passion of the Christ." Yes, research would have told you to make a movie in a dead language, with some subtitles, and beastly Roman soldiers whipping a man, mercilessly.

Art and leadership are not so far apart, and the best leaders look at research for what it is: research describes the business battlefield at a moment in time and tells you what conditions you will have to change to reach your objectives. It never tells you what decisions to make. It may imply how decisions might be received, so a leader would know what they would have to deal with in their process of leading. Research will not play an important role in saving the newspaper. Innovation and experimentation will. Research will help them understand if the changes they are making are working and to what degree.

I also found the idea of altering the way they are measured to be amusing. Nice try. Over the last year, circulation data of newspapers and magazines came into serious question. Now they want their advertisers to switch to the more nebulous "readership" which means a faithful leap into research about readership habits is added to the process. Circulation should have been rock solid. Ad buyers are supposed to believe readership data that are softer than what was recently exposed as mushy at best?

Newspaper owners have seen these changes coming for a long time, and have been active investors in other media. Whether or not the newspaper remains important is for the marketplace to decide, but they've made their bets elsewhere. Sometimes I think they're just tweaking things with their print products and trying to milk them as long as they can. Cows make milk only when they are being fed. Too often the phrase "milking the business" refers to businesses in which no further investments will be made. Gotta feed the cow now and then.

There will be a problem for all legacy media transitioning to electronic delivery, and that is that they are currently paid for advertising delivered, not advertising served. What that means is a publisher has scalability on their side. They can make their magazine or newspaper almost as big as they want, and still collect the same fees per page. Sure there are placement premiums, like inside cover, or back cover, but they are not in the same range as the issues raised by new media.

In an electronic environment, you are limited to one page, the landing screen, and then the viewer goes to other places on the site. These are always lesser amounts of clicks and views than the home page. It cannot be guaranteed that any ads will be seen in the same volume in the same way that a print version can guarantee that an ad will be delivered. Print products are not paid on the basis of ads viewed, but on the Internet they are. Your home page is your home page. This difference in the nature of revenue ultimately undermines the fixed cost structures of publishers, which is why I am far more bullish about small publishers, who don't have that infrastructure holding them back.

The article is quite good, and I highly recommend it. Catch it before the link is turned off.

*** Look at the Washington Post's survey of Internet users and their sources for news http://www.washingtonpost.com/wp-srv/marketing/presentation/nielsen/content/frame.htm

Well!! Last week at the urging of a colleague, I tried Vistaprint's (www.vistaprint.com) "free business cards" offer. It cost me $30. they didn’t say it was "free" they said it was "free*" --- yes, note the "*" --- you have to pay for shipping, and if you want a logo there's an extra charge, and --- get this--- if you want to remove the message on the back of the card which says something like "printed by Vistaprint" (if they're giving you free cards, there had to be a * after all, right?), you have to pay $10. And if you want another 250 cards, it's $10 (that charge is perfectly legit). After I placed the order I was barraged with all kinds of e-offers as I was completing the order process. It made me wonder what personal print sales would be like --- "now that I have your print order, I’ve noticed that the rugs around here are kind of worn-- I’ve got a great deal on some Berber, and shag is coming back, so you may want to get in on that trend early."

I wonder if they had an offer for "free shipping" and made me pay $10 for the cards if that would qualify as ok under an EU proposal where they would outlaw the word "free" http://www.directmag.com/news/eu-outlaw-022205/ . Whatever the case, it seemed like a bait-and-switch thing going on. I must say they had the best selection of card templates. Remember-- I have not had a business card for myself since 1997 or 1998. When I needed them for a show I printed them out myself or would the "oh gee, I just ran out" routine and took someone else's and sent them my info by e-mail. The cards will be here in about 10 days, they claimed, and they just arrived. They’re fine, as expected. I had skipped the on-screen proofing because it was taking so long (I have high speed broadband and it was taking longer than forever and just gave up), but I figured that since I was using a template and the text was correct, it wasn't all that risky.

Vistaprint (or at least businesses like them) is the wave of the future-- selling design services online as part of their process, etc--- but there is a bit of old style production-based print selling in their process that I wished was a bit more sophisticated. I’m still getting offers, way too many of them, from discounts to refer-a-friend, and I suspect others are being pulled from their bag of tricks as I write this. It’s overwhelming. What they've done is a quite an achievement, nonetheless. But the constant barrage of offers makes them seem just a bit too desperate for sales. Consultative e-selling isn't in their vocabulary yet, I guess.

By the way, in my hunting around, the iprint.com site is still up, and the online ordering for staples.com for cards is pretty bad with a horrible selection. I wonder if staples.com or someone else might not make a play for Vistaprint or someone else of its ilk. If not, they should do something to come up to Vistaprint’s level of selection or services. I suspect that staples.com probably has that in their nefarious plans somewhere... In the meantime, I'm going to see if "free*" is listed in the dictionary.

(UPDATE: on 3/10/05 WTT has a story about Vistaprint's new plant: http://members.whattheythink.com/news/newslink.cfm?id=18560 )