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Indeed, massive effects of the structural change in the agency and media market were caused by new communication technologies. Not “advertisement in media” provides the desired efficiency, effectiveness and sustainability, but “Communication with system”. This keeps the dialogue with employees, partners, suppliers, customers, and interested parties going on all levels — through a new communication structure based on intermedia communication systems.

The most important perceptions that can be derived are:

  1. “Surgery successful, patient dead!”: Communication models and strategies based on “advertisement in media” are not only expensive, but ruinous in the long run.
  2. “The new media economy”: Thought-through investments in communication with a system pay off, as they are widely used and are therefore more profitable, sustainable, and more successful.
  3. “Analogous and digital as a team”: The future is not in the online communication, but in new, intermedial structured communication architectures that are closest to us as people, because dialogues are possible at any time.

In the following the possibilities of innovations and their economic relevance are the centre of contemplations.

Communication as an economic sector?

During the last years the role and the significance of the term ”Communication economy” has become increasingly the focus of attention. Even politics and parties have discovered this field for themselves. What is behind it?

Communication economy first of all summarises service providers (agencies) and media producers (publishing houses, broadcasters) followed by cultural or artistic organisations or single people to a lesser part. The so-called communication economy however does not pose to be a homogeneous branch, as the individual members or players are too heterogeneous and pursue interests that differ too greatly. In addition, one would have to expand this “branch” by printing houses/media production service providers, so-called internet companies, E-commerce providers, technology developers, advertisement position marketers up to telephone providers, etc. Meaning all those that offer products or services which enable communication. Thus, it seems much more profitable not to perceive communication in an isolated manner, but as a main economic factor for all of us. Everybody who distributes offers, no matter which kind, is at the same time a communication company, or must realise comprehensive communication tasks. This was more difficult in the past than it is today. Because in order to operate communication with media, many expert tools were necessary that needed to be elaborately operated. High investments in devices, training, care, and development were necessary. Today, hardly any expert knowledge is necessary, as Smart Technologies are self-explaining and easy to use.

The old world (up to the 20th Century): 

Monopolistic, advertising budget-centred business models

Specialists for media communication were active in the beginning of the industry era: Printers at first, which were also publishing houses in personal union (these tasks were separated in the course of time), in the second step the specialists for advertisement joined, who took over the sales promotion. Every fraction was assigned specific tasks and specialised, monopolistically characterised business models were developed that show the following core characteristics:

Business models from the “Old world”:

  1. Agencies are in debt of advertisers and media companies to create advertising messages that act as mediator between offer and demand.
  2. Media producers process data according to the specifications of the agencies, format them for specific transmission channels (print, TV, radio, etc.).
  3. Media companies create content, distribute it, and refinance this effort mostly over advertisement proceeds.

Grave errors in the system lead to communication management similar to centrally planned economy

The income flows for agencies, media companies, and producers were ample, the profits were extremely high in the low to medium two-digit range, financed by an economy that had learned that success could be purchased over advertisement. Top-brands with top advertising budgets basically acted as monopolists on their part, as they were able to afford something that was not possible for others. The need of administration effort increased according to the increase of advertisement spendings. Marketing, market research, procurement/controlling, brand leader consultants etc. experienced a boom. The advertisement and sales promotion departments were shut down and blown up again in new form to micro cosmos-like marketing communication departments that organised themselves not only by task areas but by communication and media channels. In order to have this run smoothly, the brand responsibilities and the marketing service tasks were preferably joined with the sales. The consequences were and are fatal.

The majority of the real-life examples have in common that marketing, sales, and communication do not harmonise, respectively the tasks and possibilities of communication are not recognised and used. Communication became a high-cost, rigid administrative task.

This is also mostly because the company managers do not care for the communication to full extent and according to their responsibility, but only are for partial areas like public relations or finance communication. Everything else is delegated (internally as well as externally), with budget specifications that are supervised by controlling and/or procurements without possessing holistic evaluation options for controlling, optimisation, or success measurement. The evaluation of the communication success relates to single disciplines (like direct mailings, advertisement placing in print, TV, or in the online sector) and is based on conventions and currencies that media and media agencies agree on.

But examples also show that agencies and media producers do not carry the sole culpability of a bureaucratised communication practice with the likelihood of a planned economy. The companies themselves are contributors of the misery, because they rate communication as a necessary evil in the sense of an obligation, or, drastically worded, as appendix of the marketing intestines. Accordingly, no strategically relevant decisions can be made to make innovations and resulting new patterns of action reality.

 

 

The era of success of “Advertisement with media” undergoing resolution cultivated the thinking: The brand makes the communication. The necessary new thinking now turns this around: The communication makes the brand! As depicted, the pressure on the companies increases to act loss-free and above all profitable with their communication activities.

This is only possible if three basic principles are internalised:

1. Communication is matter of the top-manager.

2. Communication must always be valuable.

3. Communication profits from digital competence.

The contemporary communication specialist knowledge in marketing and in the management levels of the companies is not very distinct. [The author of this communication compendium has experience as college lecturer that communication designers nor marketing experts and business economists are taught about contemporary communication innovations in their studies.]. For decades one has regarded the “Advertisement in media” ultimate ratio in research and teaching and has required a standardised repertoire of communication tools. The consequences of digitalisation and the usage of Smart Communication could therefore not be correctly evaluated. Proof of Concept: The Internet was taken in as advertisement medium the minute the number of users exploded. Billions were spent by placing mounds of so-called display advertisement in form of banners, pop-ups etc. The incentive: Online advertisement was said to be cheaper than advertisement in print and TV.

However: The effect of online display advertisement was and is marginal. The lacking understanding and wrong evolution of the Internet and World Wide Web becomes a perversion and certifies the pure greed of the marketers and agencies for new income flows. Methods were advertised and asserted for the online advertisement on parts of the marketers, who are subsidiary of the established media houses, together with the media agencies, that are part of the leading agency holding, that consciously blend out the superiority and chances of the Smart Communication via web, by transferring the standards for TV and print advertisement more or less one to one, in order to be able to sell and bill placement of online advertisement. This results in three negative aspects:

1. Advertisers are misled.

2. The communication culture in the web is damaged by harassing advertisement.

3. Innovation opportunities are underutilized.

The current situation depicts the following image: 

  • Nearly 100 % of the workplaces/offices and over 80 % of the households in the leading economic nations possesses an Internet access.
  • People of all age groups use digital communication media extensively — for telephony, self management, online communication, video, photography, listening to music, speech memos, shopping, entertainment, reading a book, etc. up to the own creation of print products via linked digital printing.
  • The number of the mobile Internet-access devices is exploding.
  • “Being digital” depicts the normal situation of the most people at home and at the office. The digitalisation of communication, entertainment, and commerce based on Smart Technologies is comprehended and valued by most people as new culture technology, which offers fun and versatile interaction opportunities next to the numerous advantages.
  • Drivers of the “Digital Lifestyle” are companies and organisations (like e.g. Apple or Wikimedia Foundation), who have established innovative business models and processes with high communication technology competence in the last 10 to 15 years.

The last mentioned however in sum only provide a tiny small part of the entirety of the companies and organisations. Meaning: The majority of the providers is behind in the already existing opportunities, and must urgently freshen up its communication competence and improve it significantly. But this has not happened yet. Instead, everything is continued as before by relocating budgets or provided additional budgets, in so far this can be afforded. One tries to avoid tackling the most important task, to amend the brand name and product communication and not only perform cosmetics, or one relies on alibi-measures.

Conclusion

There is no way that uncontrolled and not very thought-through multi channel and multi dimensional communication leads to an increase of the quality and attractiveness of the content, but rather to flattening and confusion. In the end the consequence is growing dissatisfaction of the purchaser/consumers that miss lacking originality or creativity, do not feel taken seriously anymore and even hunted or at least pursued. Further consequences are:

  1. The rejection towards the traditional push-advertisement and media work is growing, because one feels increasingly harassed.
  2. The public résumé of the advertising businesses and the journalists looses greatly.
  3. The “victims” — we as purchasers, consumers, readers, users, etc. — keep our eyes open for new things respectively for alternatives in order to be able to become independent. Among other things, this explains the rapid success of social media projects.

Andreas Weber had a great interview with Mark Lawn, European Marketing Director, Professional Print Solutions, Canon Europe. It dates from end of 2011, but is still valid.

Andreas Weber: The printing industry is in a deep and ongoing crisis (affected as well by the bad economic situation).  What in your opinion are the opportunities for a turn-around?

Mark Lawn: The European graphic arts market remains a challenging environment for printing companies, whose key priorities should be to manage costs and cash and to automate technology for efficiency gains.  Nevertheless, I still see business opportunities for those companies that are also prepared to adopt a more entrepreneurial approach to new business.  In the same way that Canon looks to inspire and support our customers to make a leap to new areas of business they may not have previously considered,  senior management teams need to demonstrate strong business leadership and to have a vision for their company’s future growth, particularly through the addition of new services.  For example, for those companies that are redefining their businesses as ‘marketing communications’ service providers rather than ‘print’ service providers, the increasing adoption of a ‘multimedia’ or ‘crossmedia’ approach to content delivery for companies’ integrated marketing campaigns is proving to be a great opportunity.

Companies need to clarify exactly who they are going to target, how they are going to differentiate themselves and how they are going to add value. They should review their business plan to ensure it’s still in line with the development of their business. And if they don’t have a business plan, they need to write one.  It doesn’t have to be a complex document, but it should cover where the business is now, where the owners want to take it, how they are going to take it there and what they need to take it there.

I’d also urge printers to read the ten-point action plan that Professor Frank Romano laid out in the Canon Insight Report, The Redefinition of the Digital Printer, which was published last year.  One action he recommends is to “challenge the status quo” by investigating each print job for opportunities to add value. For example, a targeted direct mail piece may only partially be a printing job; it will also include database services, personalised URL and Internet services, and mailing services—three new areas for revenue enhancement.

Andreas Weber: Do you realize a gap between the excellent shape of print as an innovative media technology and the service level of the printing industry in general? Because most of the printers miss the possibility to make profit anymore.

I am wondering, how the innovation level and speed driven by a company like Canon could be covered by printers/Canon customers. Canon is offering ideal (state-of-the-art) solutions to make Print as Medium powerful and modern.  But coming down to the printer’s world, there seems to be an “innovation speed slow-down”…

Example: Two years ago Canon was pushing web-to-print. And Canon did that survey figuring out that most of the European printers don’t deal with web-to-print as line extension of their business model (and by the way: today, two years later we have still the same situation!).

Do we have a communication problem between printers and print buyers?  Are DMO-regions/countries in a better position than mature markets like Western Europe? Is there another innovation spirit in developing countries?

Mark Lawn: In relation to the life of the printing industry as a whole, digital printing has existed for a very short time.  Nevertheless, it’s clear that once an industry has been impacted by digital technology (e.g. photography) and the rapid pace of innovation it enables, it can be difficult to keep up with technological developments and the opportunities they create.  Acknowledging our responsibility to support our customers as much as we can, we’ve sought their views through a number of surveys.   Responding to their input, we have then developed a number of value-added services — Canon’s Insight Reports, our Essential Business Builder Program and our customer magazine, Think Digital — to try to ensure that our customers are as informed as they can be about industry trends and technologies, are aware of best practices, and are inspired to consider new directions in which to take their business.

If we take the example of web-to-print, potential users should always evaluate it properly to ensure that it is right for their business.  If it is only used as a delivery mechanism, its adoption is less likely to be successful.  If, however, it is fully integrated into the business, the technology can offer a wealth of opportunities to those print businesses looking for ways to add value to the print services that they offer their customers,

Andreas Weber: From your point of view: what are the key issues to successfully re-position print as a medium in cross-media scenarios?  Beyond technical aspects?

Means: What is the strength of print in the digital age related to the needs of corporate communication demands (by which is meant all the communication activities of a company: push and pull, internally and externally, including marketing communication, advertising, social media and crossmedia)?  A special focus is shareholder and financial community communication

Mark Lawn: I think that we need to continue to strongly promote print as a fundamental part of any cross media scenario – if print is omitted from the mix, the impact is likely to be less successful.  As the only medium to reach all five senses, print remains the most powerful and ideally complements the likes of online communications and telemarketing.  In fact, in the case of direct mail, research by the UK’s Direct Marketing Association shows that print’s effectiveness is growing: open rates for printed DM have increased from 88% to 91% since 2006, whereas email acquisition open rates have fallen from 21% to 11% since 2007.

Online media better meets a requirement for fast, direct information, but where a company needs to communicate a mass of information and complex messages, an appealing, well produced, printed document (e.g. a company’s annual report) is the superior vehicle and is likely to hold the reader’s attention for longer than its digital equivalent. Nevertheless, it’s also clear that, by taking a multi-channel approach that includes print, an organisation’s corporate communications will be more compelling and produce a higher response than by using any one medium on its own.

[German version published in Value Journal, autumn/winter 2011,
and Value iPad App, preview and download for free on Apple iTunes]

Watch as well the video conversation.
(Andreas Weber interviewing Mark Lawn)

 

“Communication with a system” is designed and realized like a cybernetic model.

The “Value Eco-System” describes a new model for business communication and enables the examination of all existing and new graphic communications measures and activities, and, insofar adequate, to adapt them or integrate them as they are. The quality and effectiveness of the communication work is dependent on the level of the ability for communication of the companies and their employees.

Thus, four of the six system areas of the Value Eco-System are to be designed to evaluate own abilities and to improve them (ValueAudit), to conduct training over the access to basic knowledge and Best Practice-examples (ValueAcademy), and to conduct the finding of relevant communication innovations systematically (ValueScouting). The knowledge management and the knowledge mediation for valuable communication are decisive (ValueCoaching) and no longer only the available means and resources for communication campaigns, which are organised by external providers of ideas and media platform operators. It is decisive to mediate content over own, controlled intermedial communication systems (ValueMedia) and to enable market interactions linked on this basis (ValueNetwork, ValueCommunities).

 

 

The “Value Eco-System” unfolds its full effect if the organisational requirements drafted below innovate the conventional, organisational structure and enable a strategic new orientation.  Under the top committees of an enterprise (partners/shareholders, supervisory board, management/board), two main departments are formed next to the financial department that are directly subordinate to the manager/chairman of the management or the board/chairman of the board:

• The Business Operations Management (Research and Development, marketing, sales, HR, production, service etc.)

• The Business Communications Management (Communication analysis and strategy, brand reception control, Public Relations, CRM, sales/turnover support, fairs etc.)

The Value Eco-System assumes a function of being a point of intersection that is used and “fed” by both main departments. It can be organised and created such that the necessary communication and interaction processes run automatically and can be flexibly adapted or optimised through the communication project management. It becomes decisive to be able to watch, evaluate and control all activities in real-time over a communication cockpit. The cockpit must allow highest possible transparency, as the management committees must be able to call up an up to date and true status about success or deficits in the graphic communications work at all times.

How can communicative ability be evaluated?

The analysis and evaluation of the communicative ability of an enterprise is a basic requirement for “Graphic communications with a system” in order to enable valuable communication. So far, this is not done in practice. Much more, objects of testing and analysis are which communication measures in image/brand build up and care and in sales and turnover promoting campaign provide what kind of effects. For every communication channel there are own, specifically designed evaluation criteria. Due to current research results, we also know that special advertisement forms, “Special Effects” or Crossmedia-campaigns in the so-called “marketing communication” are always more successful, but also always cost more [cf. among others Dr. Peter Haller, GfK: “Building Best Brands”, Munich 2009]. The demand for the best possible effect of specific communication measures however does still not answer that for the quality of the communicative ability of a company.

Completely other factors and influences are to be evaluated here, which exceed the range of the classic advertisement research or “Media-Audits” by far. The value of the communication must take place through systematic research, continuous qualities monitoring and the central control of the business communication. Within the Value Eco-System, this is done through the “ValueAudit”. A questionnaire is used at first via “ValueCheck” that contains eight topic areas with up to 25 questions each that are answered in a “Yes-or-No-statement”-rhythm. The results are displayed in a “Value Score Index” that includes a maximum of one hundred achievable points. The questioning is conducted by the Value-Auditor with decision-makers in the company. The evaluation supplies conclusive, concrete criteria for the improvement and innovation options of the organisation and structures, the communication architecture, the communication processes, the communication channels and means.

 

 

In ValueProfile-workshops the results can be presented, discussed, and realized in recommendations for action including a roadmap. On this basis, an integrated evaluation of the communication ability is possible; regular updates allow improvements.  It is useful to expand the ValueAudits to branches and economic areas, in order to be able to critically examine and optimise the own abilities over benchmark comparisons. The strategic analysis is done via ValueCheck and ValueProfile, which supplies the design of a new communication architecture as a result. The performance of the communication architecture is dependant on the quality of the ValueScouting, which means the finding of adequate, relevant communication innovations that are continuously illustratable in the ValueAcademy based on Knowledge Transfer with Best-Practice-evaluations. The finding, the selection and the implementation of communication innovations must be understood as an iterative process that can be evaluated for its value and effect through the ValueAudits and be optimised anytime.

Just think about it…

Enterprises that want to profit from valuable graphic communications and are based on a new communication model, Value Eco-Systems, significantly increase the communicative ability on the one hand, and increase the unlimited usage of relevant communication technology innovations on the other. The new possibilities for action and instructions are drafted in the scheme “Communication with a system”. It is based on organising the entire business communication through dynamic push- & pull-mechanisms that are not only limited to the interaction with customers, interested parties or partners through campaigns. All external and internal resources are integrated. This also mainly includes the technology development and the media production service.

“Communication with a system” strictly speaking no longer has a beginning and an end. Therefore, we need to forget previous conceptions of how we plan traditional communication campaigns. “Communication with a system” does however, by all means, have a starting point: The development of a communication architecture specifically and individually planned for the respective enterprise. Just as the architect designs a plan for a construction, a plan for the entire business communication must be developed that is previously analysed and evaluated via the ValueAudits. In the team the architecture plan is then realized together with the adequate partners. Technology development then has the chance of not only designing innovative technology outgoing from the ivory tower perspective, but dealing with specific requirements of the enterprises. For example, in information technology, as well as in plant construction, this procedure is common already. In communication however, it is not. If technology developers and economy establish a permanent, trusting cooperation, both sides benefit. The same is applicable to the selection of the adequate innovative communication solutions that are realized through “Digital Media Producers”. It is conceivable that creative agencies focus less on the idea development for campaigns in media; they must dedicate themselves to the creative design of innovative, digital communication solutions. Media production service providers become allrounders that join founded technology knowledge with contemporary communication know-how and facilitate the usage of complex technology solutions.

To make this possible, media production service providers must re-define their relationship towards technology developers. Because it can no longer be expected that the technology supplier must explain to the Digital Media Producer as purchaser of production means how to develop new markets and areas of application with innovative communication technologies. This has not ever worked in the past, and will all the more not be possible in the future, because the speed in technology development is constantly increasing.

Enterprises find themselves challenged to control this new cooperation of all involved parties and to keep it going in order to achieve the ideal level of usage. The more comprehensive this task is realized with internal or also external resources, the better the effectiveness of the communication can be measured and evaluated. The existing measurement tools like Balanced Scorecards are no longer sufficient. New systems are needed that join all communication plans and measure automatically with the realization of all communication projects. The principle that needs to be followed is familiar from the finance-IT-solution world — through providers like e.g. SAP or Oracle. These solutions cannot be simply transferred from the finance and controlling world in to the world of communication. Until now, no provider was able to develop adequate concepts, as the special communication knowledge and the knowledge of contemporary communication processes is lacking. However, first approaches can be recognized that arose from the software marketing for dialogue marketing reps. from the digital production management for advertising means. Via webportals that are accessed per Internet browser not only the production of advertising means is controlled, but the corresponding measures and their success can be monitored and evaluated.

Can we start? Principally yes!

The approaches for “Graphic communications with a system” are existent. However, it still needs to be checked how specific solutions can be used coming from the IT environment. This means Enterprise Document Automation-solutions like they are offered for example by HP Exstream, GMC or PrintSoft and XMPie; in addition a number of so-called Product Information Management-Systems. The approach of bundling the Business Management and the Communication Management on one platform specifically for the publishing branch and the print branch with the help of integrated software architecture is relatively new. However, until now, all of these solutions can only be assigned to specific partial areas of the business communication — especially the advertising means production, the invoice and letter dispatch, the product literature and the direct marketing. However, they form the initial basis for innovative, intermedial communication that allows one to measure, evaluate and control the communication success at all times. A point to be emphasized is that the communication means (Print, Online/Digital) can be designed individually and “customized”. This is a basic requirement for valuable graphic communications. This then fulfils the most important requirements of the task of enabling valuable communication with the help of the communication with a system of a company-specific, innovative communication architecture.

© 2014 by Andreas Weber, Value Communication AG, Mainz/Germany

 

As a suggestion

1. Rethink. The technology development advances us by taking us back to the origin of valuable communication.

2. Rate differently. Service providers or mediators in communication work are less relevant than creative innovation partners with Smart Technology competence in order to define and establish a new communication understanding in the team.

3. Rebalance. Technology ignorance is just as fatal as technology infatuation.

4. Experiment without inhibitions. Find ways and options of being able to consistently have a dialogue about the value of your relationships with customer and partners.

5. Act differently. Communication with a system makes the relevance, attractiveness, and consistent presence of mutual content the key criteria per personal and economic success.

6. Network correctly. Knowledge work profits from the striving or valuable communication and networking.

7. Philosophise. Descartes’ principle that made clarity and sophistication of thinking the maxim needs an “Update” as a contemporary version to flee from the claws of a pseudo pluralism. Suggestion: The “Cogito ergo sum” (“I think/doubt, therefore I am”) changes into “Communico ergo sumus” (“I communicate, therefore we are”).

 

++++++++++++++++++++++

About ValueCheck! and how it works

ValueCheck! is a unique approach. It unifies Communication, art and culture in three steps via Analysis, Audits and Coaching. 

Our POV: It’s time for a disruptive approach via ValueCheck!: The performance promise of Value Communication is “connect innovation to profit”. In order to realize this promise, a questionnaire including eight different parts is organized so that customers get an opportunity to check out their companies’ marketing communication level by answering ValueCheck questions.

After receiving answers, Value Communication promises to provide customers with the results based on Value Score Index. In this way, customers become more aware of their tendencies and inadequacies on track of making benefits in the market. They get a chance to increase the effectiveness of all communication activities with regard to the success of their companies.

Your benefits

• ValueCheck! is something like a fitness check-up to be prepared for The Age of the Customer.
• ValueCheck! delivers orientation how to optimize all dimensions of your internal and external business communication success.
• ValueCheck! guides you through the digital world to accelerate your profitable growth.

You want to check it out?

Just send us an email!
Or contact us via Facebook or Twitter!

a.weber{at)value-communication.com

https://www.facebook.com/ValueCommunicationAG

@ValueCommAG

More Information about Value Communication

http://valuetrendradar.com/about/

 

 

 

Optimism despite poor numbers

CEO Bernhard Schreier announced on July 18th, 2012 that he will leave Heidelberger Druckmaschinen AG by end of the year 2012. The Supervisory Board appointed Dr. Gerold Linzbach as the new CEO by September 1st, 2012. Mr. Linzbach is a very experienced and well accepted  top-manager but without experience in the printing industry sector. Is this a good or a bad indicator? We don’t know yet but we will briefly re-think Heidelbergs situation.

Our take, reflecting Heidelberg’s annual press conference (June 14, 2012).

Status quo:
• The 2011/2012 result was overshadowed by a loss of around € 230 million.
• After all, with EBITDA of 90 million euros and operating profit of 3 million € is located almost at the same level like last year.
• In essence, a very self-conscious top-management team presented at the annual press conference on 14 June 2012 those bad figures by showcasing new efforts. (See our live tweets below)
• At drupa 2012 Heidelberg was a match winner getting a hugh impact on the business results in the second half of fy 2012/2013.
• So in fact Heidelberg is again in a good position to recover and become profitable.

Dilemma:
The economic and financial press in Germany and even by investors/shareholders didn’t got that message in form of good news.

At the press conference from the present economic journalists and news-initiated from negative headlines. Excerpts: “dry spell at Heideldruck persist” (Reuters / wiwo.de), “Printing Crisis: Heidelberg put off shareholders” (FTD), “Another losing year / downturn underestimated” (Handelsblatt), “Why no turnaround in sight ‘( Manager Magazine), “Heidelberg continues in the red” (Focus Money / Focus Online).

Investment experts published, Heidelberg has on the way to the turnaround still a rocky road ahead. “Market participants remain skeptical despite drupa 2012 and focus their pieces and throw on the market. (…) THE SHAREHOLDERS continues to advise on an investment. “Heidelberg’s share price had landed on penny stock level and sank on 14 June 2012 at market close again from almost one euro.

Challenge:
The economic and financial sector does not seem to trust Heidelberg (anymore) to turn back the tax and, particularly for investors to create interesting opportunities. The same goes for how the so-called Global Industry Analyst scene for years hardly still busy with Heidelberg technology, but primarily only with digital printing technology and players such as Canon, HP, Kodak, Konica Minolta, Ricoh and Xerox.

Suggestions:
The new CEO, starting at September 1st, 2012 has to bring together business, organizational, technical and market-related facts and issues. And he should pro-actively communicate about it! The perception of Heidelberg is not balanced in the right way. Means: Heidelberg executives/employees, customers, analysts and investors experience Heidelberg in a totally different way. This problem couldn’t be solved by the brand management only (which is already excellent).

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Tweets by zeitenwende007

Joining this morning the #HeidelbergFY press event. Curious about results and outlook@Heideldruck
10:02 AM – 14 Jun 12 via Twitter for iPad · Details

Top Facts&Notes in 21 Tweets – Published on June 14th, 2012 in real time

#Heidelberg CEO Bernhard Schreier: Last years results are not sufficient. But we made it. Even if the market situation was bad!

10:08 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Marcel Kiessling is now responsible for sales (worldwide). He keeps the service division. More work, more success.

10:11 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Financial situation of Heidelberg is in a good shape, CFO Dirk Kaliebe reported.

10:13 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Efficiency program Focus 2012 is working well. Revenues shrinking, but EBIT is stabil. Free cash flow is better than expected.

10:17 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg North America had a come back. Asia Pacific revenues grow and are as strong as EMEA. BRIC markets cover 46 % of total revenues.

10:21 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg But in total net loss after taxes -230 mio. Euros. Networking capital management is working well and hits expectations.

10:24 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Equity balance of 23. Net debt went down to 243 mio. Euros.

10:28 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Marcel Kiessling started already the reorganization of the global sales strategy to hit the structural changes in the market.

10:32 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg In more than 30 sales units Heidelberg owns 4500 sales and service professional, addressing 170 countries. Focus on BRIC markets

10:34 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg #China and #Brazil have the strongest growth and a top prority for Heidelberg. But Western markets keep stabil in the future.

10:36 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Services efficiency will be synchronized according to the regional changes.

10:39 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Consumables become more important. HEI market share will go up from 4,5%to 7%. Market potencial in total 8 billion Euros

10:41 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Will the print market be a stabil biz in the future? Stephan Plenz stated that HEI solutions enable to extend biz opportunities.

10:44 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg HEI customers are always able to run a profitable biz and to monetise their investments to be able to reinvest in innovations.

10:46 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Digital Printing has a great relevance for Heidelberg. Focus: Premium applications in commercial, packaging and label printing.

10:52 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Collaboration with Landa could enable hugh areas of growth as well as HEI solutions for 3D printing and printed electronics.

10:55 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg “2008 ist uns der Himmel auf den Kopf gefallen”, stated CEO Bernhard Schreier. Great quote! @Heideldruck

10:57 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg drupa delivered stimulation for graphic communications. Germany and China are now the biggest markets measured by investments.

11:03 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg post drupa outlook: 2nd half of FY2012/2013 will become the stronger period and cover 60% of the HEI revenues.

11:07 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Biggest risc will be the development of the global economy and the impact on the media biz. HEI will be flexible enough to react
11:09 AM – 14 Jun 12 via Twitter for iPad · Details

#Heidelberg Conclusion: HEI could hit the needs for quality oriented Entrepreneurs for innovative print communication in the digital age.
11:19 AM – 14 Jun 12 via Twitter for iPad · Diesen Tweet integrieren

POV on reporters

#Heidelberg Some of the print/newspaper editors do not understand the print world. How could they deliver good reports about @Heideldruck ?

11:39 AM – 14 Jun 12 via Twitter for iPad · Details

Background/Facts

Heidelberger Druck ‏@Heideldruck

Heidelberg Financial Year 2011/2012 http://bit.ly/KIpIy8

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»Our new approach: Targeted global print services and web-to-business solutions«
Magnus Nilsson

The Sweden based international Printing Group Elanders AB is ready to expand and re-invent the print business. Magnus Nilsson, since 2009 President and CEO, shares his knowledge and explains the targets. It’s the very first time that we can learn how the digitization is changing the way we have to manage a print business!

What was the secret of Elanders AB’s success in the last year 2011?

Magnus Nilsson: The secret of success was that we focused the cost aspects: We consolidated our production facilities in several countries to utilize Poland and Hungary for low-cost production to produce for the German and Swedish market. So we were able to manufacture on an excellent industrial standard level: higher productivity, more shifts and so on. Customers today don‘t care about where we produce. They want suppliers which are cost efficient. But this was only the first step to strengthen our commercial printing business. The next step was to push personalized print services and to enter the packing market, for us a new challenging market with big growth opportunities. And last but not least through our latest strategic acquisitions of d|o|m and fotokasten we have access to web-to-business and e-commerce solutions.

Does this approach influences the structure of your customer bases?

Magnus Nilsson: It opens Elanders up for new customers. Via fotokasten and its photo print services we get access to 400.000 consumers as new customers. This is an interesting base for growth. Because we got a lot of knowledge we could use to develop existing customers. Most of them are well know brands and own an end-consumer business. So we combine their world with our extended products and services. A good example is Ritter Sport where we bring packaging, digital printing and web-to-business-services together to create personalized chocolate packages.

What impact have the main stream digital technologies on that?

Magnus Nilsson: Since many years digital technologies are a key driver for the print industry to create new applications in combining web services and on-demand print product solutions. If you know how to handle the complexity of the media mix you will win. I am not anxious about print as a medium. But this development will touch the core structure of the graphic arts industry. Lots of small and medium size printers won‘t be able to transform there businesses like we and some others did it already. You have to change to hit the market and customer needs.

So the digitization will change the way we manage a print business?

Magnus Nilsson: Sure. On one hand there is a hugh demand for web-to-print services and automized production workflows. On the other hand this is not enough. You could compare it to the world of Internet Banking. In the first step this was a web-centric digital business. In the mean time some of the ”Digital Banks“ in Sweden opened up small offices to serve and consult customers on a personal, face-to-face level. Actually we make the same experience: customers rely on our web-based print services and they use our services and digital production competency for a global production and services support.

Digital competency helps you to manage your print business in a much better way?

Magnus Nilsson: Yes, indeed. We have at Elanders that slogan ‘Your worldwide printing partner’. It covers also the dimensions beyond printing. For one of our biggest customers – I can‘t disclosure the companies name – we established a digital platform to manage there commercial print communication demand in all parts of the world. They are dealing with 3.000 retailers around the globe. Our platform guarantees a seamless ”distribute and print”-approach.  Because a marketing manager i. e. in Canada could initiate digitally the production order to deliver printed marketing materials to the U.S. which will be printed by Elanders in the U.S. That means we can compete in a much better way with all the local printers which are not able like Elanders to server there customers on a global bases. By the way: Its not only about web-based production services. Everything is connected, like electronic invoicing to the customers own web systems.

What is the next step?

Magnus Nilsson: We want to transfer those capabilities Elanders provides for commercial printing to our packaging offerings. We want to become a global packing supplier offering one-shot global solutions. This will change our business approach and the culture of Elanders. To handle innovative technologies is not the question any more. Our biggest challenge means to recruit the right people. Therefore we started last year a trainee program to train people coming from other areas than print. We do not want to make the same mistake like many printers did in the past to be machine- and technology centric. Our customers expect quality, reliability, enhanced services and a good knowledge beyond printing.

What are the key benefits for your customers in the future?

Magnus Nilsson: First of all global production and delivery services for commercial print and packaging on a fixed price agreements for the different areas in the world. Our customers don‘t have to search for local suppliers anymore, which costs always a lot of time and money. Second we will be able with our web-to-business approach to be a partner for our customers to develop specific and innovative solutions for individualize products. We will build web-shops, we will program Apps, we use all the new ways which make marketing much more effective. I am in a good mood and very optimistic about the future. Because we found a way to balance cost efficiency and innovative exciting solution development to make our customers even more successful. We know what‘s going on to bring a higher value to print communication. This relates to the structural change caused by the digitization. And I think our strategy by targeted and customized global print services and web-to-business solutions is very unique.

Interview: Andreas Weber
Illustration: Lidia Wey
Date: April 2012

Watch and share:
Elanders’ smart video on YouTube!

Spot 1 

“The next big thing” — Print in the communications mix

Heidelberger Druckmaschinen set important accents: The booth in Hall 1 trumped with the installation of five real-printing facilities. Printed materials of all kinds were produced in real terms – from data processing to finished products. All necessary equipment had been specifically tested in advance to enable them to deliver top performance. Next to this it showed what hybrid productions can look like: Inkjet and offset printing in the mix, toner-based digital printing and offset printing in combination with online and mobile applications, as well as displaying significant perspectives and taking a futuristic look at “Printed Electronics” in the Innovation Center of the Heidelberg booth. It became apparent that print in the communications mix is extremely important, if not central in an indispensable role.

Xerox made its mark in automated production in both commercial and packaging printing, as well as within the range of XMPie in cross-media approach. Particularly impressive at Xerox was the way it has created a way of bridging the gap from print to social media and cloud printing. Many others can also be named, and what could be seen with other exhibitors such as Canon, Konica Minolta, Ricoh, and Xeikon. Xeikon just stunned with its never-ending drive for innovation, which portrayed this relatively small player as an outstanding inventor. The drupa innovation park and lots of small ’Hot Shops’ impressed on around 130 stalls, with their innovations. My personal favorite – thanks to Bernd Zipper for the tip: cardolution from Vienna showed how it is able to integrate RFID chips into cardboard and offer NFC Business Cards for everyone. The chip transmits the address information from printed business cards correctly onto smartphones.

In this sense, drupa 2012 was a great success, marked by a few dozen prominent exhibitors who could prove that print has an unbroken power of innovation. Small drawback: The papermakers were barely visible. This is a shame. Sappi was as a premium brand, for example, represented by three smaller stands, but it was not clear what Sappi’s added-value drupa message was. The same goes for digital printing paper market leader Mondi. There was a presence at drupa, but probably more devoted to the contact to technology developers instead to the market of buyers. The exception was UPM in Hall 6, which focused its presentations and displays on both commercial and newspaper customers, as well as the end-user with a very strong environmental message added.

Spot 2

Change in Business Communication approach — Consolidation amongst media professionals

It is amazing and worthy of consideration, because this has been at drupa on this scale never before: The number of members of the press has declined by about 3,000 from 84 countries in the year 2008 to 2,400 from 75 countries in 2012. This is followed by the number of members of the press exactly the trend of sharp decline in visitors (minus 20 percent compared to 2008). Regardless of whether the media coverage of drupa 2012, quantitatively or qualitatively, have been better or worse, the reason should be scrutinized. Because traditionally it was always important for a drupa, to include professional competence as a media partner. It appeared however that press tasks are redefined, and in fact the view of many exhibitors will be to use trade magazines only to serve as a PR platform for exhibitors and their trade fair offers. Journalists are in short supply and tend to be stylized as claqueurs.

The trade fair Drupa Daily newspaper also reflects this again, because as of Haymarket on behalf of Messe Düsseldorf in the circadian rhythm-driven, advertising-funded print and online project, everything was worked up, that happened during the drupa 2012. But what could be the added value if the day’s events have been rumoured — and nothing more? In addition, all that was relevant was made via Twitter and / or YouTube by major exhibitors and analysts immediately publicize themselves. And of course, concise comments. For visitors and decision makers this could offer enormous advantages, since one could learn just about Twitter quickly and concisely in a direct digital path. Provided you know how it works! Talking digital: The drupa app for smartphones and iPad by Messe Düsseldorf disappointed, because only simple queries were possible, and it delivered no added value compared to the printed exhibition catalogue. That could have been done much better with a little extra effort.

Spot 3

A great step forward — Technology vendors are publishers and broadcasters in one!

A new feature with signal effect: Canon Switzerland produced on behalf of Canon Europe, a whole series of world-class professional interviews, created in high-quality TV style of its own Canon web-TV team. Very well done! Compliment! HP, Konica Minolta, Xerox, and Landa, newcomers, as well as many other smaller exhibitors demonstrated as well, their social media power. A visit to press conferences at drupa was thus in principle obsolete. What was presented at a conference for the representatives of the press was, at the same moment of the conference, published by the press conference organizers themselves on the web. To attend press conferences is only worthwhile, therefore, if you made a point to be entertained in an intelligent way, such as EFI CEO Guy Gecht did, or wondering / annoyed by Kodak CEO Antonio Perez, whose arrogant appearance, where self-perception and reality seems to collide with his company.

An inevitable effect: Those drupa exhibitors who publish multimedia self-invest none or hardly any money in professional advertising. The advertising revenues presented have so far been the main source of of income for specialist media publishers. This may explain why the number of press representatives declined so much. Many print journalists are really annoyed about the digital competition and keep Twitter & Co. for the devil. And drupa exhibitors have (still) not demonstrated that they can use social media effectively in the interests of customers and prospects. Too many use Twitter, for example, to take over their PR agencies, the ghost-writing on Twitter. The result is product-related communications push content. But Twitter users are interested in smart conversations — they don‘t like push-PR messages very much.

Spot 4

Print trade shows in trouble — Missing the end customers (print buyers)

Unexpectedly, was not the sharp drop in visitors and media representatives at drupa 2012. Messe Düsseldorf had indicated in advance that around 350,000 and is no longer, as once expected, the nearly 400,000 visitors. And it was hoped that from the Far East, and especially from China, that many new visitors would come from this region but there were “only” just over 310,000 visitors (the exhibitor staff, journalists, VIP’s not included). Many exhibitors were upset. They said that a record number of visitors is less important. More important is to get the right visitors to come, i.e. the decision makers and prospective buyers from the graphic arts markets. This has worked. Sales exceeded some expectations. All in all, sales revenues in the region of 2 to 2.5 billion EURO are likely to be implemented at, or immediately following drupa 2012.

drupa Was the drupa 2012 a success or not? The answer is yes and no at the same time! Yes, because it was found that innovation lies in the printing and paper technology development. No, because the efficacy was limited to the drupa industry insider. For more than a decade it has become clear that the fate of the printing and paper industry is no longer decided by printing and paper specialists, but by their customers and the market players in the online world. If they lock them out at drupa, the pace of innovation and adaptation in the communications market will weigh too rapidly from print. A look at the bigger picture beyond would have been useful — but remained well below or were not properly pursued. This show other important German trade fairs such as the automotive mega-show, IAA, or the Frankfurt Book Fair on exactly how to permanently overtakes success: The industry participants are always there together: from makers, to visitors and customers of all kinds. This is exactly what was needed, but was omitted from the drupa 2012 in Dusseldorf. Too bad!

Spot 5

WANTED! — Link to the communication specialists in the market

It is regrettable, however, that the drupa 2012 was unable to fully exploit its potential. For many years drupa does not adequately represent important groups of visitors, especially the so-called “print buyers”, the principal of printers from agencies and enterprises / brands. Drupa 2012 should have been able to inspire and motivate a lot of print buyers, more than ever before. Documents can be this simple: I myself had a few dozen print buyers and decision makers come from agencies and businesses to drupa 2012 – for example, in cooperation with the GWA. GWA drupa special interest day on 9 May 2012. GWA is the leading agency association in Germany. Through the Bank’s enthusiasm for present agency employees was huge when they are properly involved. To get the right knowledge, what is at stake, and how to profit from technological innovations in the communications business.

The exhibitors visited by GWA — Heidelberg, HP, Xerox and exhibitors and i. e. map specialist locr in the drupa innovation park   had been well prepared and adjusted to the print buyer. HP GSB‘s global marketing director Francois Martin, it could be, for example, do not take to prove with facts and creative prime examples of how the marketing and brand benefits from digital printing productions. For example, when BBDO individualized for the client Smart in Paris, an out-of-home campaign with 2092 posters, it scored much attention and in less than 14 days had produced posters in the main streets of Paris.

How can the fact matter that drupa 2012 was not an attraction point for agency and brand representatives on its own? The drupa cube was made by Messe Duesseldorf with daily events to major application issues. But the total of 1,000 participants or so in 13 days, presented in terms of the size of the communications industries employ was only a drop in the ocean. In Germany alone, nearly 800,000 professionals work as communications professionals. In this respect the drupa participation was in vanishingly small per thousand range.

In addition, the carrier of drupa, led by the German Engineering Federation VDMA and the German print association groups have a very narrow focus: They address only techies and printers out of their memberships. They are not linked to the communication specialists in the market. Say the established contact structures are directed to those target groups, offering the classic technologies of printing and paper sector or common printing services.

By Andreas Weber, CEO of Value Communication AG, Germany’s leading Business Communications Analyst and Innovation Expert

Illustration by Lidia Wey

Imagine it is 2016 and no one visits drupa anymore. Quasi in nano-technology-style the exhibition area will be reduced to the shoebox-size. And on top of the box is an oversized Benny Landa, the genius, the visionary, the only one who knew even in 2012, where it’s all going. And all the enthusiasm stuck on the lips when he performed his Hollywood-style mega-show.

What happened?

No question, 2012 converted the drupa into drupalanda. Landanano attracted trade show organisers, trade fair visitors, exhibitors and the press under its spell. If the Indigo founder Benny Landa was not present in 2012, there would have been no sensation at drupa. Although the media and analysts are falling over themselves in the announcement of ‘new innovations’ (sic), drupa 2012 offered vast amounts of (product) innovations, but basically no innovations. Apart from just Landa, but Landa is still quite a distance away from market-ready products and solutions. He showed this in a preliminary-type, prototype version. But already incredibly vivid. Hundreds of decision-makers were enticed into placing advance orders and paid deposits. Sweden’s leading global printing group Elanders was the first signing a LOI for three Landa machines, as CEO Magnus Nilsson and Board of Directors member Peter Sommer announced on 9 May, 2012.

Landa’s innovative approach is based on three main aspects:

• A new technology concept for all types of printing machines that print via NanoInk with digital printing on all types of substrates.

• A completely new user interface for printing presses, which works on the simplicity of the iPhone and iPad and oriented by mega-huge touch screen display.

• A cost calculation that will allow both the total costs of ownership, as well as the price per page to produce cheaper, than it is now possible.

Where in the future will the new print volumes come from?

Landa was able to get the leadership at drupa. And he was so smart as to close, shortly before the exhibition opened with Heidelberg as the most important drupa exhibitor, a co-operation, and to say at the same time that he is still a good friend of HP. What might this mean? Landa is a wolf in sheep’s clothing, or the do-gooder who wants to save the industry (technology suppliers such as printers)? Perhaps the charm lies in the fact that Benny Landa could be both in one. So the do-gooder in sheep’s clothing, like the wolf, mangled the status quo. He is willing to undertake the ‘Kerner’ work, to renew the industry radically. In other words, he is willing to be an Evangelist to do the basic work to renew the industry radically.

My question directly asked to Benny Landa he leaves open (he wouldn‘t like to talk about it): Where will all those print volumes come from in the future, which takes the form of increasing it in order to generate growth? Currently it looks as though the global print volume will remain almost the same, but the value decreases, per unit, with pressure from month to month. Discounts of up to 25 per cent are not uncommon. Many printers do still make profit with their printed materials turnover, but profit tends to lean towards zero. The same is true for many of their suppliers: they sell, but earnings before taxation (ebita) is very, very low…

Learning: Don‘t try to be mainstream by optimization of the existing. Be an innovator! Change the rules!

 

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