In the commercial printing industry, the small successes that have been experienced are highly celebrated because market recovery since 2009 has been difficult. The industry has been trending with growth that is 50% of what the overall GDP has been in the United States.
According to Printing Impressions, the printing industry is expected to post growth in the 1% range.
The issue is that has one national economy recovers and looks to the commercial printing industry, another economy begins to falter. The United States may be currently strong for the industry, but China and Europe have been weaker. This has created small, but positive growth and since not every industry can make that claim, the commercial printing industry celebrates that success.
These trends are expected to be seen in the next decade to help maintain those growth factors and hopefully expand upon them.
Brand Focus and the Commercial Printing Industry
- In 2015, the commercial printing industry registered 8 months of shipments more than $7 billion — the longest number of months at that level since a 10-month period in 2010 according to Printing News.
- As of October 2015, there had also been 17 consecutive months of increased shipments compared to the previous year.
- The means that the 12-month-moving-total of inflation-adjusted shipments is greater than $86.2 billion, which is the highest level in four years.
- Economic factors and brand focus are directly tied to the success of the commercial printing industry. This is because 45% of a brand’s image is directly attributed to what it is able to say and how it says it. 64% of people cite shared values as the main reason why they have a relationship with a brand.
- Growth is even being seen in direct mail commercial printing, which according to the USPS, saw growth of 0.3% in 2015.
- Francois Martin, a marketing director at HP, told Printing News: “While the past five years saw a 20% decline in total commercial pages driven by mega trends, including a global recession and increased adoption of social media, HP digital pages continue to grow, demonstrating that the future of commercial printing is driven by digital.”
- Watch for inkjet technologies in particular to begin being able to open up the relationship between printing and branding so more businesses can take advantage of what this industry is able to provide.
- This has created a global market which generates $708 billion annually, but average annualized growth over the past 5 years that has seen zero overall growth. According to First Research, the commercial printing industry in the US includes around 35,000 companies with $90 billion of annual revenue.
- In the US, the 2- and 4-year election cycles also provide a boost to the industry. Ronnie Davis, Senior VP of Printing Industries of America, told PI World that he expects up to a 0.5% increase in revenues for the 2016 Presidential election alone.
- According to Sageworks, this has helped to create consistent sales growth within the industry of 3-5% over the past 5 years. The net profit margin has also increased from 1.4% to 5.2% over the same time period.
There are many benefits to branding, but they cannot be experienced unless the message of the brand is able to reach the consumer. The commercial printing industry will continue to focus on communicating the benefits of branding to their B2B consumers as larger budgets slowly become available at the end of the post-recession recovery cycle in 2016-2017. Watch for new technologies to open up the industry to more businesses as well, including new inkjet technologies, so that SMBs [small-to-medium-sized businesses] can take advantage of what branding is able to provide as well.
How Economic Conditions Affect the Commercial Printing Industry
- According to The Smithers Group, the largest economies in Western Europe and North America with companies active in the commercial printing industry have experienced low or negative growth in recent years. Declines have been up to 12% over the 2010-2014 review period.
- Growth within the industry was almost entirely because of the emerging needs of the APAC region, which employed nearly 570,000 new people during the same period.
- Of reviewed global totals in 2014, the APAC region accounted for 63.9% and 71.9% of companies and employees respectively.
- This has forced technology improvements and innovation on the commercial printing industry to keep pace. Sheet fed presses print up to 16 pages of letter-sized product at a time, with up to 15,000 impressions per hour.
- Web presses print 32 pages at a time at speeds over 40,000 impressions per hour, and are usually used for production runs of more than 50,000 copies.
- The spot price of crude oil is also an economic factor which affects the commercial printing industry. As of 2016, with prices near 10 year lows, the industry is looking to take advantage of the market change to begin increasing profits through new technologies, innovations, and product offerings.
- Watch for more providers to look for ways to standardize their approach to printing so that they can keep their costs down and profits higher. Those who treat printing as a manufacturing process instead of a service industry will likely see the highest levels of growth no matter what the economic conditions may be.
The commercial printing industry is one of the largest industries in the US and around the world. Because many of the major economies have been in decline during the current post-recession cycle which began in 2009, the emerging markets have had to prop up the industry on a global scale. As the mature markets begin to recover, especially with crude oil prices remaining low, the potential for growth returns. When combined with the continued growth in the emerging markets, the rise in revenues could exceed all expectations if economic conditions remain similar to what they are today.
Web-to-Print and Print On-Demand Change Everything
- The value of the web-to-print industry in the United States is expected to exceed $250 million per year in the next decade.
- With effective web-to-print services, a business can upload their own graphics or materials through the Cloud and then order commercial printing that can be shipped to anywhere around the world.
- 80% of offices in the United States, according to reporting from Mimeo, are deciding to use less paper in this office. This also offers the commercial printing industry an opportunity to meet new B2B needs.
- This creates a need for custom content that the commercial printing industry will be able to help create and/or distribute. 76% of shoppers say they feel better about a company after reading their custom content.
- According to Jeff Bullas, marketing teams were forecast to spend $135 billion dollars on new digital marketing content this year.
- Content marketing costs 62% less than other forms of marketing and generates up to 3x more leads when compared to traditional commercial printing and marketing efforts.
- More than 3 billion people may be using social networks by 2020, which creates a high level need for digital print information.
- Consumer engagement increases by nearly 40% when there are graphics which accompany custom content.
The commercial printing industry has a great opportunity to go online with the same products they’re creating for traditional formats. By offering these services, especially over the Cloud, they can create on-demand offerings which allow a business of virtually any size to be able to create branding messages based on their preferences. This saves businesses time and money, but it also creates expanded revenue opportunities for the industry. In many ways, this is a win/win scenario, but only if those within the printing industry are willing to make the necessary investments which may be required.
Changing the Relationship May Be Required
- The providers within the commercial printing industry which are seeing the highest levels of success are getting involved earlier with their clients’ projects, staying involved for longer, and offering a broader range of communication services.
- Customized programs with help businesses communicate effectively with their own clients is the most popular service currently being offered by the industry.
- Watch for more providers in the printing industry to get involved earlier in each project, extending their sales funnels, in order to give themselves a greater revenue opportunity.
- Certain economic and regulation factors may be able to encourage this relationship to be changed as well. Pro-growth tax reforms, corporate income tax reductions, export assistance, trade agreements, and other regulations could encourage more businesses to seek out commercial printing relationships.
The commercial industry is going to need to get involved early on in new projects because businesses are looking to streamline everything. From a marketing standpoint, this means looking for both online and print solutions that maintain branding and communication with their prospects and clients. If the industry misses out on these early opportunities, then there is a good chance that the little bit of growth that is being celebrated will disappear within the next 5 years and be difficult to get back.
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