Freakonomics, Long Tails, Flat Worlds: Where's My Cheese?

It's been the “weeks” that was. The nation's ninth largest printer, Banta, spurning unwelcome overtures by Cenveo (seventh largest), closes plants, sells Danbury Press, swallows a half-billion-dollar poison pill, then flees to the saving embrace of RR Donnelley (the largest). The pair are so indebted, say analysts, they need not fear unfriendly advances. Observers suggest Cenveo could be their target.

Donnelley-y-Banta reflects not an industry failing, but one massively restructuring—as are its customers, living out current pop-business paradigms gathered in the off-hand headline above. While consultants browbeat printers over supposed failings, scads of blue-chip print customers in all the finest markets—music firms, publishers, television and movie companies, computer manufacturers, auto and steel makers, discount retailers, and in industries high tech and low—are slogging through similar tectonic market shifts.

Printers boast rising sales and plenty of cash—and by the gauges of common economic understanding, or the edgy paradigms of Freakonomics— show the industry is doing quite well. With pressrooms busy, paper scarce and revenues having regained all ground lost to 9/11, the wildly successful Graph Expo was crowded with technological advances, and printers buying them. Undaunted by a projected slowdown for 2007, willing to bet the farm they can make a go of it using new technology and better, if not best, practices, such active agents in the market are worthy proof as any bar chart why sheetfed press sales will rise 70% to $951 million; and webs record $1.1 billion in sales, to help output $165 billion in print products.

Newspaper publishers in major city dailies recorded 2% or 3% drops in circulation—the product of more honest reporting of complimentary and bulk distribution extra copies formerly thrown in the ditch. A movement toward local ownership of media revives, as cities see they have no voice when headquarters and Wall Street never want to invest in generating and printing content worth reading, or searching. Corporate luminaries readily seek newspapers: Jack Welch waving $600 million at the Boston Globe; Barry Geffen competing with Hollywood millionaires to spend $2 billion for the L.A. Times owners.

Meanwhile, a report surfaces: “Junk Mail is Alive and Growing,” and readers learn they are not alone in their preference for the 114 billion pieces of direct mail—catalogs, credit card solicitations, coupons. “I would rather get a catalog over a call during dinner 10 times over,” Ginger Stickel tells the New York Times. Me too, and no wonder 100 million households have registered on the do-not-call lists.

Advertisers are rediscovering print-mail works better than e-mail for selling. The latest Direct Marketing Assn. study, presented at its October gathering, confirms that for direct-order sales or getting contributions, catalogs (2.30%) and direct mail (2.18%) earn the highest responses.

Universal McCann and the U.S. Postal Service affirm direct mailers will spend $59.6 billion—up $4 billion—while Internet ads, including search, total $16 billion, $1.5 billion of it for 600 billion junk e-mail ads. Such excessive e-mailing is being screened away by spam filters and privacy rules.

Now much is being made of the 50 newspapers that have agreed to let Google sell space ads for them. But this turn of events underscores something printers have learned as they get Web-enabled. You have to make it easier to buy. And Google, running out of prime search words (“steaks,” “airline tickets”) and a bidding process that drives up the cost of favorites beyond the reach of smaller marketers, needs something else to sell. That something, as the industry advocacy group The Print Council tells us so succinctly, is “Print: The Multi-medium.”

bill.esler@reedbusiness.com