Actions to Take Now
Market Buzz and Accenture's Take
Actions to Take Now
The current changes in the printing industry are creating a great deal of uncertainty for program managers and print buyers around the stability of their programs and manufacturing schedules, among other things. While every program is different and relationships with vendors rely on a variety of factors, there are several steps you can take to make sure you have program stability in the volatile market.
- Document program requirements and expectations: Printing has been an industry driven by volatile specifications with tight deadlines resulting in informal documentation of program requirements. The best programs have information clearly spelled out with each party understanding program expectations, specifications, schedule and clarification of associated costs.
- Ensure your contracts are up to date: Vendor uncertainty may raise questions around contractual arrangements. Companies should review their arrangements to identify areas to strengthen relationships or understand potential program risks.
- Understand your cost structure: It is important to understand all the costs associated with your programs; costs can vary greatly based on requirements, schedules and vendors so it is important to have visibility to subcomponent costs.
- Leverage overall spend: Companies have multiple points of procurement for printed materials, which minimize the opportunity to capitalize on overall spend. Companies that leverage their combined spend will benefit from an improved negotiating position for manufacturing costs and internal efficiencies from dealing with fewer vendors.
- Reduce cost through collaboration: Champion performance-focused possibilities to reduce costs with your vendors: The best source of ideas to capitalize on your vendors’ efficiencies is the vendors themselves; challenge them to help you identify and implement ways to reduce your marketing print spend.
Vendors value your business, which makes this a great opportunity to talk with your suppliers, review your needs and identify areas that can strengthen relationships, which will benefit all parties.
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Market Buzz and Accenture's Take
Real-time Bidding and Programmatic Ad Buying
Real-time Bidding (RTB) and Programmatic Buying are catch-all terms to describe the growing use of automated tools to procure online advertising, one impression at a time, based on the unique characteristics of the ad’s recipient. Specific components in the category include Demand Side Platforms (DSPs), Data Management Platforms (DMPs), ad exchanges and agency trading desks (which are buying platforms set up and owned by ad agency holding companies that use outside DMP/DSP technology). The basic function of these platforms is to allow an advertiser to set the parameters of their buy to target Internet users with certain demographic, geographic or behavioral traits. Once an Internet user with those traits is located on a website where there is an unsold impression, the platform can automatically bid on the impression on behalf of the advertiser. The ad of the winning advertiser is then served into that previously unsold impression space and, presumably, is seen by the type of Internet user that the advertiser was targeting. The whole process, from identifying a desirable user and open ad space to the auction of the ad space to the delivery of the ad happens within milliseconds. Standard display banners comprise the bulk of the volume through these platforms, though video and mobile ads are becoming more widely available through this method of buying.
There are many realities a marketer must understand prior to getting heavily involved in RTB or Programmatic Buying. Chief among them is the pervasive lack of transparency into where on the Web their ads are actually appearing and how much they’re being charged by the platform/agency for the media, relative to the market rate actually paid by the platform/agency.
The promise of RTB or Programmatic Buying brings opportunities for both cost and process efficiency for advertisers who invest in digital and those opportunities will expand as more video, mobile and social ad inventory becomes available through these platforms. And as they expand, there’s an even greater need for independent expertise in the space to help marketers realize that promise.
Quad Graphics Completes the Acquisition of Vertis
In January, Quad Graphics announced the completion of the acquisition of Vertis Holdings, Inc., for a net purchase price of $170 million.
According to their press release, Quad expects the acquisition of Vertis to strengthen and expand its client offering with:
- An enhanced range of products, services and revenue-generating solutions.
- Expanded industry vertical expertise.
- Increased manufacturing flexibility and distribution efficiencies from an extended geographic footprint.
- New opportunities to help clients realize mailing and distribution cost-savings from the combined volumes and capabilities of the two companies.
The combined company will employ approximately 25,000 employees from more than 70 print-production facilities in North America, Latin America and Europe.
The acquisition of Vertis by Quad generates more consolidation in an industry segment (retail inserts) that has been struggling for quite some time. While the elimination of a vendor may be challenging to some, adding the Vertis facilities into the Quad platform strengthens Quad’s overall product offering and could provide clients with greater access to leveraged opportunities and more efficient print options.
The long-term question is how will this acquisition change the look of the combined manufacturing operations? Of course there are no answers, but we will watch the situation closely and make sure our customers are positioned for change.