Transpromo

TransPromo printing has received a fair amount of attention in the past few years, and continues to be promoted by vendors and industry consultants as an excellent growth opportunity for printers in times of diminishing revenues. However, it seems that while opportunity is knocking for both printers and marketers, not many are answering the call just yet.

There is not always uniform agreement as to what TransPromo means, other than a combination of transactional and promotional. TransPromo is generally understood to include transaction statements, or monthly invoices to customers creating a marketing opportunity. The TransPromo materials appear as digitally printed ‘onserts’ (promotional materials printed directly on the transactional document). TransPromo materials can also be created and disseminated through electronic mediums, just like transactional statements.

The TransPromo marketing message is based on a recipient’s past behavior and practices- a basic example would be a bookseller offering a discount on another book purchase based on a previous transaction. In addition, TransPromo could also include information to help educate clients (for example, group benefits policy holders), custom publishing offerings (newsletters), and service providers (concert tickets) just to name a few examples. It can also be used to distribute customized marketing collateral within organizations.

The line between TransPromo printing and Variable Data Printing (VDP) can be a bit blurred when discussing personalized service provider notification statements that include cross sells and up sells. However the underlying distinction is that TransPromo is not a conventional segmented marketing offer, but rather is directed at a company’s existing client base, and tied to an existing, reoccurring, communication stream. TransPromo uses what vendors describe as ‘high value relationship statements’ as an opportunity to incorporate an individualized message that includes a clear ‘call to action’ on the recipient’s part, so that the results can be measured and evaluated.

Often, TransPromo incorporates a marketing message onto an existing customer-facing communication as part of a business-to-consumer initiative. However, in August 2009, Cary Sherburne wrote an interesting article that appeared on WhatTheyThink.com that told of a company using TransPromo for a really unique business-to-business application, indicating that people are starting to push the conventional TransPromo model.

Things that are Driving TransPromo

The current state of our economy has led to a sharp attention to budgets and spending, which in turn has led to increasing pressure for marketing groups to accomplish more with the same (or smaller) budgets. Marketing Departments are continually searching for effective techniques to deliver their message, and get a measurable response, taking advantage of multi-channel delivery of content for increased response or ‘lift’. TransPromo can be an attractive option for a tight budget – the company is already sending out those statements anyway, and TransPromo can add a lot of bang per advertising dollar.

TransPromo has the potential to offer organizations tangible benefits through increased responses (sales volumes), reduced call centre volume (and subsequent costs) through improved education and communications (better clarity, bringing attention to important changes), as well as helping to migrate some interactions to the web. It can also improve overall environmental impact through reduced print volume with onsert printing. An intangible benefit is the additional branding opportunity that can be used to help build overall customer loyalty within the existing customer base.

In an often cited example, InfoPrint (Infoprint.com/transpromo), a subsidiary of Ricoh specializing in output solutions for the digital imaging and document industry, ran an award winning comprehensive TransPromo campaign in late 2008 for Best Western and their branded credit card. The control group received statements with variable data on preprinted shells, with inserts. The TransPromo group received analytics-driven content instead of the usual inserts. The analytically driven TransPromo content produced a response of 500% compared to the control group, as well as measurable increases in length of stays, as well as incremental revenues.

Even with the increase in electronic distribution of transactional documents, studies show that a significant number of people still like to get mail, especially monthly statements. People open their statements, and they’re engaged while doing so. Based on research from the consulting company InfoTrends (www.capv.com), consumers typically spend two to three minutes reviewing statements, with 20% spending five minutes or more. As well, over 60% of people studied indicated that print is an important part of the transaction experience. It is not surprising then, to hear of studies being done to determine the market value of the unused space on transactions – effectively trying to quantify the market for remnant ad space available on existing transactions. A concise evaluation of this space for use with onsert printing has the potential to create a unique revenue stream that could be used to offset transactional printing costs.

When we think about variable data used in transactional printing, most of us automatically think of one colour imprinting on a pre-printed colour shell. Indeed this is the norm, and there are reasons for this. Full colour variable data, especially with image content, can be expensive and slow to produce. Without economy and speed of production, it can be cost-prohibitive to use colour in variable TransPromo printing. Recently however, there has been a renewed drive for high volume, web inkjet presses to handle variable transactional printing, and some of the new offerings can produce offset print quality and speed without breaking the bank.

With the advent of large format, high-speed four colour inkjet web presses, the economical and efficient use of colour has become another enabler for TransPromo: apparently colour gets results. A variety of studies reveal increases in location, comprehension, and retention of data in colour documents compared to their monochrome equivalents.

In the InfoPrint/Best Western campaign noted above, the effectiveness of colour use in TransPromo marketing is evident. InfoPrint sent half of the TransPromo customers a black and white piece, while the other half were given colour pieces. According to InfoPrint, the black and white TransPromo pieces produced an 18% lift over the traditional print pieces normally done, while the color TransPromo pieces delivered a 27% increase. Overall, the campaign boasted an ROI of 278%. The use of colour increases positive responses from customers, and has been shown to convey a higher sense of value, and helps to highlight key information.

Technical Advancements That Benefit TransPromo

As TransPromo gains momentum as a powerful marketing tool, more software and hardware developers have begun to implement technical improvements to their offerings aimed at the TransPromo market, which in turn makes it more economically and technically possible to execute the complex TransPromo projects.

One specific example of such a development is Adobe’s newest PDF standard, PDF/VT. According to Mark Lewiecki, Senior Product Manager for the Adobe PDF Print Engine, PDF/VT offers ‘clean hand-offs, efficient prepress workflows, effective high-ROI campaigns, and compelling, graphically rich content’. PDF/VT has the benefit of being an ISO standard and shows promise as variable data file format, especially with TransPromo in mind. Well-known names in the VDP market have shown interest in PDF/VT. For example, Pageflex announced its support for PDF/VT back in May, and reinforced this decision with the release of Pageflex 7.6 in early September of this year.

Having a VDP file format like PDF/VT is a positive step in increasing speed and efficiency of file processing, but making the front end faster is pointless unless you can increase print speeds. Combine more efficient file processing with faster variable data print speeds, and you have a recipe for economical, high yield customized print. Here’s where the latest offerings of high-speed inkjet presses, like the ones offered by Kodak or the HP for example, compliment the TransPromo mix.

There is no question that high-speed inkjet presses are a hot topic these days. In an article he wrote for WhatTheyThink.com, Richard Romano referred to IPEX 2010 as the ‘inkjet IPEX’. With regards to the high-speed inkjet web offset market, there are two contenders that have caught the authors’ attention: the Kodak PROSPER and the HP Inkjet Web Press.

The Kodak PROSPER series of web presses use Kodak’s branded Stream Inkjet Technology to deliver quality output at speeds that encroach upon offset standards. Currently there are two models of the PROSPER press on the market. The PROSPER 1000 features monochrome output at a width of 24.5 inches and a running speed of up to 650 feet per minute. With quality reaching up to 133 lpi on a variety of substrate types and weights, and a duty cycle of 120 million letter size pages per month, this press is designed to deliver. As an added bonus, this press can be field upgraded to colour, making it an economical, and flexible solution for someone wanting to start with black and white TransPromo, with intentions of migrating to colour. The PROPSER 5000 XL offers much of the performance markers of the 1000, but is full colour and can print at an impressive 175 lpi.

The HP Inkjet Web Press is also worth noting. The HP Inkjet Web Press is a four-colour web press with a 30-inch web width and a top speed of 400 feet per minute. With a 600 x 1200 dpi resolution, HP refers to the output of this press as being comparable to offset.

Of course, print is not the only tool for targeted marketing, but it can be a great way to propagate tools for digital ends of complex campaigns. Many companies have found personalized URLs (PURLs) to be very effective in tracking the effectiveness of targeted campaigns. What better way to track the success of a targeted campaign than by creating a personalized URL and tracking actual visits to the site? More recently, Quick Response (QR) codes have been used to create interaction and provide a landing page for interested consumers to get more information or special offers, allowing marketers to link the landing page to the print product, resulting in detailed analytics. This can easily be applied to TransPromo printing. For example, QR Express, a module for Transpromo Express by Crawford Technologies Inc., enables the application of QR Codes to bills, statements and other transactional materials. Using QR codes to enhance TransPromo offerings has the potential to further increase revenues, profitability and customer retention through user interaction.

Personalized graphics, like the ones you can create with products like XMPie are still a great way to get end-user attention; however, if you want to get really creative, you can incorporate technologies like augmented reality into your TransPromo piece to add additional 3-dimensional electronic information to the 2-dimensional print. Augmented reality, as it relates to print, involves a printed piece with optical markers on it. When that printed piece is placed in front of a webcam, three-dimensional digital imagery is incorporated into the two dimensional piece. If you want to see a really cool example of this, check out the augmented reality ad campaign done by BMW for their Mini line of cars. A short video on the making of the ad and the results can be found at http://adsoftheworld.com/media/ambient/mini_augmented_reality. This is still a relatively new concept, but it certainly differentiates the product offering!

Barriers to TransPromo Printing

With the investments required for TransPromo, it is not surprising that large financial institutions are reportedly the leaders in the field. However the ‘big rush’ to TransPromo still appears to be waiting to happen for the vast majority.

Overall complexity is one of the barriers to the overall uptake of TransPromo, both for customers and service providers. A TransPromo service provider is usually expected to offer not just a successful technical execution, but also a comprehensive end-to-end solution from concept to distribution, as well as tracking, measuring and reporting.

A successful execution of TransPromo printing requires business relationship management at an organizational level. Large HVTO (high volume transaction output) companies can have complex internal structures; consequently, a TransPromo project would likely touch several strategic business units. This could require a seasoned supplier with the skill set necessary to identify a senior level project champion within the organization. They would help the potential client navigate the project path in their own company, involving product managers, marketing and creative teams, operations, production and IT personnel along the way. A TransPromo supplier has to be prepared for a different kind of selling approach, with long sales cycles, which would ideally involve sales representatives educated and dedicated to the task.

TransPromo and Analytics

The big value add of TransPromo marketing is not based on the technical execution, but in the data that drives the offer; the analysts who review, clean and manipulate the data from the CRM (customer relationship management) systems, possibly synthesizing it with third party data, looking for associations and sequences, developing predictive models and forecasting predications of future behavior. It’s the 21st century’s version of magic.

Analytics combine a customer’s previous action with information on their geography, and/or demographics. This is similar to the behavioral marketing used online. While there are privacy concerns with regards to how the information is collected and used, in general the belief is that customers will value messages they feel are directly relevant to them. Sophisticated providers may even offer customers the ability to self-select or customize their level of participation.

One of the challenges of working with sensitive client data is making sure that the data remains safe and secure throughout the entire TransPromo process. This requires an infrastructure that supports the security of the customer’s private data. Traditional printers that have not explored TransPromo printing before may have their work cut out for them to get up to speed in this regard. While many printing companies are cognizant of the security measures required to secure sensitive printed materials (annual reports, lottery tickets, transit tickets, etc.), storing and streaming sensitive data, possibly from multiple data stores, may be new ground for some. Initiating the high-level security for TransPromo printing can be challenging. There are several key production points that require security, and not all of the security measures required are for digital data protection. TransPromo printing requires a multi- tiered approach to security to protect both digital and physical assets. With TransPromo printing, there needs to be a balance between acceptable levels of security, and fluidity of information exchange.

In the end, the security issues really come down to one simple fact: companies working with data, either for analysis or execution need to ensure data security and integrity. This could include a third party audit for certification (SAS 70 certification). The cost varies widely, but can approach $50 000 – $100 000, with annual recertification costs. Print service providers not already in the variable market may not have in-house resources available to manage the level of security necessary, in which case they could explore a partnership with a third party organization to assist them- there are lots of them in the market.

Conclusion

The current state of the economy is both a challenge and an opportunity. Some reports have direct mail being down 25% in 2009 compared to 2008. This may be creating a renewed opportunity for TransPromo as Marketing Managers look to improve quantified results without increasing their relative expenditures.

However TransPromo also means a reduction in print volume, less direct mail and printed inserts, and therefore poses yet another challenge for printers. For TransPromo to meet its full potential, those offering TransPromo services will need to educate customers in the full value of what they are getting, and establish TransPromo pricing policies. Direct mail, in some ways, can be considered to be a bit like cost per click in digital media, the cost to deliver the message to a recipient. However an arguably more important notion is the costs per conversion, the cost to have a person take the action that is desired. As with the digital experience, it can be difficult for suppliers to capture full value for this.

As Frank Romano at RIT has reported, “VDP volume is less than 10 percent of all digital printing and digital printing is less than 15 percent of all printing”.

The history of other process innovations shows that the general market needs a bit of time to catch up. Software and hardware vendors have started to really refine their offerings, and standards for variable data have continued to be developed, and as a result the infrastructure for TransPromo could be ready for fast followers to start to take advantage. The potential is there, but the TransPromo industry still appears to be waiting to take off, and many interested providers appear to be holding off for others to take the first step as ‘early adopters’, effectively waiting to become ‘fast followers’, and learn from others experiences. One thing is for certain; it will be very interesting to see how TransPromo evolves over the next 12 to 18 months.

*Dear Graphic Arts Magazine readers:

We regret to inform you of an error in this article, that was originally printed in GAM’s October issue. The article incorrectly credited a very successful variable data pilot project, done with Best Western in late 2008. The pilot, executed by Ricoh’s InfoPrint, used control groups and clearly demonstrated the potential for analytics driven variable marketing to increase response rates. In the article, this project was incorrectly credited to InfoTrends instead of InfoPrint.

The information in this online article has been edited and corrected, and a retraction notice will appear in the February print edition. We apologize to InfoPrint and Graphic Arts Magazine readers for any confusion this has caused.

Sincerely,

Jason Lisi and Chris Smyth,

Contributing Writers, Transpromo article, October 2010 issue