The VDP Statistics You Probably Don’t Know

By | September 28, 2012

When we talk about the future of digital printing, we talk about variable data and how the future of print marketing is in 1:1 / personalized printing. But does that mean that volumes of data-driven printing are growing? Or if they are, that marketing applications are driving the growth? Not necessarily.

On October 31, Pira is releasing a report “The Future of Variable Data Printing to 2017” that I am currently finishing writing. In it, there are some sobering statistics.  I’m not sure at this point what numbers I can release, so I’ll just speak in generalities for now.

Globally, VDP is forecast to rise only incrementally between 2012-17. In the areas of promotion and marketing, it’s forecast to be down incrementally — something that flies in the face of conventional wisdom.

In this industry, we talk about the value of ROI, real-time tracking, monitoring, metrics, and measurement, personalization and relevance, and so on, as driving growth in the markets. To a certain extent, that’s true. It drives a shift in the ratio between static and personalized printing in some markets. But this isn’t a blanket statement we can make.

VDP is also used for pure production efficiency and serialization, which is something we don’t talk about much but which, according to these global Pira numbers, is a much larger factor in overall market growth than VDP for marketing and promotion.

For a long time, there has been a disconnect between the promise and reality when it comes to the opportunities in VDP for the average printer. The more I fully absorb these Pira statistics, the more I see why. VDP offers growth potential, but it’s in pockets. It’s in certain applications, in certain geographies, and using certain production processes. If you have the right application but wrong process, if you have the right process but wrong geography, it’s no wonder it’s such a tough row to hoe.

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13 thoughts on “The VDP Statistics You Probably Don’t Know

  1. Gregg

    There is a misconception that our print customers have all this data available and are ready to engage in unique 1:1 campaigns. My experience is that few customers have data and those who do don’t know what they have or how to get at it. What’s the point in variable data without data? You can educate your customers on applications but unless you control their IT department, good luck getting at it. There are still “walls” around IT that even high level officers cannot break down. They are scared to death of anyone outside their organization coming near it.

  2. John Johnson

    Heidi,

    Finally someone has the facts and not just more “hope”. VDP’s greatest abuse is the use of it by digital press and software salespeople using it to land million dollar equipment/services onto the PSPs floors. Having experienced the birthing of 1:1 marketing in the digital age of the early 90’s and building systems to test it out, and then building digital print facilities to render the product portion, it has proven to be a bear. It is a tangled web of moving parts, lack of knowledge and misinformation coupled with inefficient systems for measurement and over hyped expectations. VDP is not the marketing savior. As you mention, it’s a great benefit to the process when it comes to workflow, but used as a marketing pitch, it falls on its face. There are so many moving parts necessary for a service provider to master in order to deliver a profitable solution. As you say, it’s a tough row to hoe and it’s not going to get any easier as the market is flooded with myriad offerings and confusion.

  3. Bob Rymarchuk

    We have worked with VDP for many years now and I will reinforce what has said in previous comments. Smaller companies do not have their customer information set up in usable databases unless they are in the finanacial or healthcare sectors. These sectors are extremely reluctant to release that information due to privacy and security concerns. Where we have had companies that have maintained databases on their customer – VDP marketing has been effective. These are few and far between. VDP is vastly over-hyped and is more applicable to in plant operations. We are not a large operation (under 500K/yr) and VDP accounts for way less than 1% of revenue. Not significant and very time consuming (read not very profitable)

  4. jacob aizikowitz

    There were few things I thought about commenting on, even prior to seeing the coming report, but now when I read the few comments herein above, I feel that the need for some feedback is even stronger.

    VDP is a technology. it allows using a digital print engine to efficiently produce batch jobs of multiple documents that are varied from each other (and not identical copies as “normal” “traditional” print job does). How much can each document differ from the others in such VDP jobs is something that depends also on the underlining technology used to specify the print job. Forms-based technology restricts variability quite a lot. Objects based variability gives much more freedom (see whitepapers in http://www.xmpie.com/wp if you want to read more details).

    the source for VDP jobs can be either from batch production of a document template against a list of, say, 100,000 recipients, or from multiple individuals interacting with a template, say through some interactive web portals, each customizing it to their own personal choices and then releasing it to production.

    The second — interactive — scenario, even though externally is described by multiple sessions of different individuals each creating, interactively, one unique copy of a document, can result in one big job where all of these individual requests are aggregated and the job is specified using VDP technology in order to enable efficient processing, with caching, re-use, etc.

    Data is of course critical for enabling a VDP job, but as can be seen from the second scenario above, some times its less critical. Data is provided interactively, individually, and still solid state-of-the-art VDP technology is needed in order to handle a decent volume of individual visitors to a portal.

    Another means of overcoming the Data barrier is doing cross media campaigns, where initially recipients are engaged based on very little data and yet compelling creative, leading them to a personalized landing site, where they are providing information interactively and then a follow-up printed piece (or email) can be dependent of very current and rich data.

    So, presenting VDP as a means for s/w vendors and digital print vendors to extract more and more money from the struggling print service providers community is misinterpretation. I am a software vendor, and I can not speak for all, but for sure there are customers of mine that took our technology as a catalyst, and catapulted their business to something more inspiring, more successful, and with much better handle on their long term future.

    In this era, where everything is multichannel, and everything is highly targeted and personal,but where there is clear evidence that tangible stuff — print — is important for successful campaigns, there is no choice to print providers but to embrace VDP and multichannel and excel in data, variability, and cross media. They do not need to become marketers, but they must be the masters of all technologies for multichannel 1:1, including VDP.

  5. Harvey

    Heidi, for too many years VDP has been a way of putting lipstick on a pig. Poor strategies and lackluster design and copy can now have a person’s name on it. WOW! Were you aware that most (read 99%) of the marketing programs now in force have failed to achieve expectations, however conservative as they might be. As soon as the creative designers and writers learn how to use VDP in ways not currently in vogue, they will be the catalyst that drives a whole new wave of VDP and 1:1 products that will revolutionize marketing. In understanding the value and power of 1:1 I was able to generate responses that were off the charts. I am hooked on 1:1 as the only form of communications that will not only survive the media shake-out but thrive in an environment still run by marketing strategies rooted in the sixties.

  6. John Johnson

    Jacob,

    No one questions the validity of VDP. That’s not the issue. But having the tool doesn’t land the PSP more business. The real issue is the chasm between the print service providers who are trying to generate more business from their existing clients and the technology savvy required to do such. PSPs have proven they are slow to adopt and they cannot keep up with the technology. Technologists continue to progress leaving the PSPs in the dust. Someone needs to address this chasm and begin to build bridges between the technology and the real world needs of SME PSPs. They cannot and will not take on the high cost and foreign tasks of building platforms and frameworks to service a customer they don’t even know how to land. They buy digital presses without software. They buy software without the capabilities needed to serve their customers properly. They buy software with the intent of serving their clients, all to find out their staff cannot master the software and their sales staff cannot land the types of clients necessary to bring reasonable return. It’s truly a cart and horse and rider issue of significant magnitude. http://bit.ly/PUfaBu

  7. Heidi Tolliver-Walker Post author

    @ Jacob. Your points are well taken. It raises a question, however, about the term “VDP.” When most service providers think of VDP (and the rest of us in the industry, too), we think of documents dynamically generated —not just based on data in a spreadsheet — but based on rules set up by the marketer. If this, then that. Absent that set of rules, I would argue that many of the products and workflows you mention would be considered ultra short-run customization, which while producing similar results, is actually a different process. Your thoughts?

  8. Joe Manos

    Heidi great stuff as always. All of the contributors have brought additional insight to the discussion – well done!

    Here’s the challenge with this topic. All of the innovative use cases for VDP (and there are many and growing by a select number of service provides) are driven by data. As Jacob stated the data doesn’t have to be perfect to start with and it can be improved over time with well executed Cross Channel Marketing campaigns.

    BUT…the decision makers for these innovative campaigns aren’t the folks most print sales reps are calling on, and when they do get in front of the right people in most cases, they aren’t prepared to showcase the innovative tools available to the marketer.

    Those companies and reps that have this ability and are calling on the right level – they are generating lots of innovative use cases for Personalized VDP / Marketing Programs and they are growing their businesses.

    Sadly. it is only a small percentage of the industry BUT there are plenty of opportunities for growth because it works and is effective.

    Simply stated – it’s all about the data, the right contact level and the ability to leverage the right VDP approach to meet a specific customer objective.

    I can think of at least twenty campaigns of this type with millions of data touches taking place in our world at this point in time. The study data presents but a single view point but marketers are very interested in adding effective VDP use cases to their marketing mix and that will continue to grow .

  9. Heidi Tolliver-Walker Post author

    Joe, agreed!

    The question — and this is something we rarely (if ever) hear discussed — is whether investment in VDP workflow actually grows print volumes on an industrywide basis or whether it simply protects them.

    Heidi

  10. Tony Hodgson

    Heidi,

    It only flies in the face of conventional wisdom if we think in terms of conventional print. Variable data print is different.

    The business logic of conventional print was that more is better – it made it cheaper for the customer and a more efficient use of resources by the printer.

    The business logic of variable data printing is the opposite – it’s that fewer is better. The value of variable data print lies in the relevance of the personalised item to the individual recipient. The more relevant the content is, the more likely you can achieve the same results with fewer copies. Less is more with digital print and as we get smarter with the data and content that drives it the value will come less from the quantity of printing done and more from the quality of the outcomes gained for the customer. In the digital age the important industry metric is value not volume.

    Now, I don’t now whether this is the reason why PIRA are predicting an incremental decline. Somehow I doubt it. I imagine that it’s more likely to be that the people they have asked are simply saying that they will do more marketing online than offline in the future. I look forward to learning more when PIRA’s report is published.

  11. Scott Draeger

    This is a great post, with comments that have elevated the topic through the inclusion of multiple perspectives.

    First, I am anxious to see the numbers. Confusing numbers are a wonderful signal for all of us to pay closer attention to major impending shifts.

    I really like Joe’s line of thinking, with some of John’s perspective thrown in to make it more concrete. Calling on the right people is absolutely critical. If you’re talking to purchasing and selling VDP by the CPM, you’re not going to keep your lights on.

    Of course, you have to find the right people, as Joe points out. This is not an easy task. It gets more difficult, once you find these people. You need to co-develop programs that are designed to deliver the outcomes they desire. You’re not selling output, you’re facilitating the achievement of their business goals. You have to get these new contacts to understand the value of the data and skills they have. Then, you can get them excited about marketing in new ways. Once they understand what you can deliver, they will be in a position to harness the power you have available. But, if they don’t understand, they can only see VDP in terms of CPM.

  12. jacob aizikowitz

    Although I am not sure that blogging like that is the best way of handling this great dialogue, I will assume that because its timely and relevant it makes sense.

    I understand that one can define VDP to mean only the practice of batch production of personalized or customized documents driven by list of recipients and a database and rules. Can’t argue here because its a choice of definition.

    Our view is driven from thinking about Personalization and Relevancy. So, although originally our technology thinking was around batch production, we quickly realized that when a person interacts with a document through the web and creates a flavor / version that reflect their specific interaction then the resulting document is indeed personal. When you try to think technically what does it mean to produce multiple such documents that result from multiple concurrent interactions of different individuals with the same or different templates for, say, print and then for postal delivery, you see very quickly that aggregation and VDP technology is exactly what one needs.
    (Heidi: I will be more than happy to discuss this, so please let me know when and how do you want to do it).

    I guess both Joe and I suggested that there are creative ways to overcome shortage or inaccessibility of Data, so no need to expand here.

    I will close again by our belief that PSPs are technology savvy — in general. They can master web design, scripting, and data technologies. Hence they have a chance of becoming the masters of Multichannel Communications Services. We believe that heading in such a direction is what they should do, rather than aiming to becoming Marketing Service Providers, which, for some of them is truly a foreign profession.

  13. Heidi Tolliver-Walker Post author

    Hi, Jacob.

    I agree that this is somewhat an odd forum for discussing these issues, but I think it’s a very good and appropriate one because it holds the discussion publicly in a way that allows the entire industry to participate. Digital Nirvana is read by just about everyone in this industry who moves and shakes, and with viral sharing, that reach gets multiplied. Just by the number of comments and Tweets of this post, I think it shows how important this discussion is right now.

    I understand what you are saying about the way XMPie defines “variable data” to include collaborative, W2P-style interactions to create one-offs, but the challenge as I see it is in accuracy of definitions.

    “Relevance” is something that doesn’t require data-driven print. It can be achieved by basic segmentation. That alone can create relevance.

    “Personalization” can have two definitions. I can “personalize” something by tweaking a template and ordering a product designed just for me. Or a marketer can “personalize” an entire run — with no input from the recipient — based on information drawn from a database. These are two entirely different workflows, and those markets have different drivers and dynamics.

    So the question is whether “variable data printing” (data-driven printing) accurately covers both definitions. Both one-off personalization (consumer-driven) and database-driven personalization (marketer-driven) both create personalized results. But are both variable data?

    Yes, I’d love to have a discussion with you about this. Let’s figure out how to set something up. I’d love to run some kind of Q&A from your perspective.

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