The small but growing digital printing segment received a major boost last week, when Hewlett-Packard, the Palo Alto, CA-based computer manufacturer, and Omnicom Group Inc., the New York-based marketing holding company, said they will co-pilot a digital print supply chain for several multinational brands in 2008.
Digital print has received a lot of attention recently, with benefits including its ability to customize print jobs and streamline print production. Currently, only a small portion of printing worldwide is done via digital.
Omnicom spotted a strategic opportunity in this trend, prompting its partnership with HP. “Of the 50 trillion pages that were printed [worldwide] last year, only 9% were printed digitally,” said Andrew Robertson, president/CEO of BBDO Worldwide, a key advertising agency in the Omnicom group, via e-mail. “To us, [the digital print space] screams opportunities.”
The deal between HP and Omnicom is a boon to digital print because of the impressive size of the partners involved. Its significance is that “two premier brands are making a commitment to and validating the advantages of digital printing through a partnership that can extend to customers and create a competitive advantage” for Omnicom and its clients, according to Doug Vaughan, VP of communications for the Imaging and Printing Group at HP.
“Digital print is only going to accelerate in terms of growth,” Vaughan continued. “With the improved speeds and better costs of digital, it’s not a matter of if it [accelerates], but when it does.”
He added that there is interest in what HP and Omnicom are doing — not only from the latter’s client base but from other communications companies as well.
In 2007, HP’s Imaging and Printing Group had a net revenue growth rate of 1.8%. It was the second fastest growing division within the company, after the Personal Systems Group.
The cornerstone of the partnership will be how HP and Omnicom leverage the advantages of digital print from the point of creation all the way through distribution.
“We are going to work with HP to design new ways to use its Web-enabled services to transform the way print can be used in marketing communications, increasing efficiency and efficacy, and reducing the impact on the environment,” Robertson said, calling the program a “The win, win, win, win” for the parties involved.
The pilot program is expected to begin sometime in the next six months.
As part of the digital workflow management program HPis developing with Omnicom, there will be a Web-based portal that will enable the holding company’s agencies and their clients to better manage documents, track individual projects, reduce printing duplication and waste and gain visibility into marketing spends.
The program will be applied across direct mail, packaging, marketing collateral, point of sale materials and traditional advertising, including print ads, billboards and building wraps, using HP’s network of print service providers.
Omnicom will also take advantage of HP’s variable data capabilities to create personalized and targeted campaigns.
The advantages of this partnership are significant, Vaughan said. Printing documents on demand will reduce unwanted duplication of materials that may be unneeded. Adigital print supply chain can accelerate how quickly marketing materials go from being created to reaching consumers by as much as 50%. Omnicom will also be able to track work better across its many agencies, thereby improving its ability to assess the return on investment of marketing campaigns. And, through HP’s variable data capabilities, Omnicom’s agencies will be able to improve overall activation rates for customers and the return on marketing investments.
Already a big player in the digital press arena, HP has been building out its digital workflow management capability over the past few years, according to Vaughan.
In March, HP introduced its first-ever graphic arts workflow portfolio, the HP SmartStream Digital Workflow Portfolio, which brings together several products previously introduced and new products designed to provide workflow management from job creation to fulfillment. HP Indigo presses will be the first hardware devices to employ SmartStream.
SmartStream is one of several recent initiatives in support of HP’s Print 2.0 strategy, which was introduced last year and is intended to capture more digital pages from the analog print market and enable printing customers to take advantage of new market segments and business opportunities