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Outdoor advertising and point-of-sale (PoS) are set to be major growth markets for print, according to a presentation by marketing expert Alan Mitchell at Fespa’s Directors’ Summit held earlier this year.

Mitchell argued that, as a result of the fragmentation of the media market and the desire for brands to reach customers while they are out and about, these sectors would blossom in the future.

Statistics provided by the Outdoor Advertising Association (OAA) appear to bear this out. The OAA says that outdoor’s revenue has grown by 51% since 1998 and it’s projected that the average British person will increase their leisure time spent out of the home by a further 31% over the next 15 years. In addition, around 94% of the UK’s top 100 advertisers use outdoor and its share of display advertising revenue currently stands at around the 9.3% mark, which leaves plenty of scope for growth.

But what will enable this growth to occur and what are the major obstacles that stand in the way?

Move towards litho
One of the biggest changes in large-format printing over the past year or so has been a move away from screen presses with a number of printers investing in new digital and, in particular, litho kit. Capital Print & Display, SP Group and screen printer B&P Group have all invested in new litho presses recently – a trend that industry pundits expect to continue.

“Everyone wants litho,” says Duncan Hesse, managing director of Newcastle-based outdoor advertising and PoS specialist NSL.

“They don’t want screen anymore. Custo­mers want quality and they can have a much more vibrant image with litho. Litho has also taken away all of the bad points that used to be associated with it, such as make­ready issues.”

Hesse bought his first litho press, a KBA Rapida 205, last year, and he says that 80% of the firm’s business is now litho because clients prefer it and because run lengths of as low as 100 are now cost-effective on this type of machine. He expects litho to completely replace the firm’s screen work, in the near future.

“We’ve got people who have come on board and they just want litho print. Some used to accept screen, but they have put a stop to it and they have told us that the only want litho now. We’re not investing a penny in screen print because it’s just not worth it.”

Another PoS company that splashed out on a litho press recently is Bezier, which opted for a five-colour KBA Rapida 162a.

On announcing the purchase, Bezier chief executive Mark Shaw said: “Our decision to purchase the KBA machine has been led by our current mix of work, demand from the marketplace, and our need for
latent capacity. It is imperative that we are able to respond to our clients’ needs and the increasing pace of the PoP [point of purchase] market and having this new technology will ensure we are able to deliver the increased volume and range of output required to stay at the forefront of the industry.”

But litho is not the only beneficiary of recent investment activity. Digital is also faring well, according to James Hobday, head of sales at wide-format digital print manufacturer Roland DG (UK) – especially for those looking to stay ahead of the competition or break into new markets. “We’re now seeing the expanding acceptance of wide-format digital printing by companies outside our traditional customer base,” says Hobday. “Litho printers, screen printers and specialist print on demand digital press houses are all expressing an interest as they see the additional revenue streams that wide-format printing and the PoS and outdoor markets can offer their businesses.”

One area where digital is anticipated to come to the fore in the future is short-run PoS work – especially as marketers look to create better targeted campaigns. With shorter run lengths on litho presses becoming more cost-efficient – the magical break even figure often cited is 100-plus – there are still a lot of jobs below that mark that could be mopped up by digital presses, as Russell Tookey, head of sales and marketing at London PoS firm Capital Print & Display underlines.

“There is a definite increase in the demand for localised PoS advertising, and large-format digital printing is perfect for the production of short runs or one offs to use for market testing. We expect this side of our business to increase by around 10-15% over the next three to five years,” says Tookey.

Another fillip for PoS and outdoor printers is the increased prices that some are rumoured to be charging.
A buyer from a major retailer recently lamented that he could no longer afford to use his favourite PoS printer because the firm’s owner refused to budge on price. “We ask him to pitch for work with the other companies that we use and he always just misses out because his quote is too high, but despite telling him this, he steadfastly refuses to adjust his prices,” the buyer explains.

Rising costs
While most PoS printers confirm that prices are slowly going up, they say that this is due to the price of raw materials – such as paper and electricity – increasing and that margins remain the same.

Tookey confirms: “Pricing with fast-moving PoS manufacturing fluctuates greatly across the many markets we serve. Our pricing is affected via our material suppliers and increases the demand on an annual basis, but the price a client may pay also depends on general utility costs and product type.”
So what of the future? Despite the introduction of numerous technological innovations hailed as “the next big thing” and “the death of printed posters”, so far, they have failed to deliver on the marketing hype.

NSL’s Hesse believes that new technology will affect the London scene, but he doesn’t believe that it will be rolled out across the country because the implementation costs are too prohibitive.

Immediate impact
Tookey agrees that the economics are not quite right yet for new technologies and that print still delivers the impact PoS advertising requires for the best price. And even when it does become cost-effective to place screens everywhere, he thinks that there will “still be a demand for the high-quality printed image because that is what creates the immediate visual impact on a billboard or in a retail interior space”.

The good news for printers at least is that outdoor advertising experts agree that the printed poster market is still the cheapest and most efficient way of reaching a mass audience.

“Admittedly, we are in a fast changing environment with the likes of digital illuminated posters becoming more popular but, at the moment, this type of advertising comes at a price,” says Peter Lygo, production manager at Posterscope, one of the UK’s leading outdoor communications agencies.

“Until we reach a time when the digital unit cost can match the unit cost of a printed poster, and reach the same range of audience, then I think the printed poster is quite safe as an advertising medium for some time to come, particularly as the print quality is so good these days, even on digital presses.”