Case 3: World Beat, a Direct-Mail Catalog Company Using the Web to Compete with the Web
| With all of the attention given to retail business over the web, it's easy to forget that printed direct mail advertising, otherwise known as "sale mail," continues to thrive. The Direct Marketing Association estimated that in 1999, overall spending on direct marketing totaled $176.5 billion, generating more than $1.5 trillion in sales. Of that total figure, direct mail advertising totaled $42.2 billion, or about a quarter of all direct marketing expenditures. By comparison, spending on online marketing amounted to $14.2 billion in 1999.[15] For printers, according to Printing Industries of America, advertising accounts for almost half (44.8%) of the total demand for commercial printing,[16] and direct mail printing was estimated to grow some 7.6% in the year 2000.Volumes for related catalog and marketing/promotional collateral jobs growth were 5.4% and 8.0%, respectively.[17] While many individual sites offer a "My" feature for customization, a service called Octopus can also aggregate data from many sites based on user preferences. For World Beat, a specialty catalog company featuring apparel, jewelry , and crafts imported from Africa, Asia, and the Caribbean, online purchasing offers great potential, but World Beat still has a customer base that likes printed catalogs and purchases a significant volume of goods from the printed material. The company has noted a critical trend in direct marketing, driven in large part by the web ” specifically , customization of content. While World Beat anticipates keeping its print catalog customers, it needs a strategy to better tailor its offerings to the various tastes of its eclectic clientele. By producing specialized versions of its catalogs, World Beat can increase merchandise sales and reduce production costs. The reduced costs come from producing smaller catalogs that cut down on paper, manufacturing, and postage . One real company, Experian, offers a service called Visitor Solutions that helps make web customization happen. The company is one of the largest vendors of consumer data, and Visitor Solutions lets web marketers combine the data collected from web sites with the data in the Experian databases.[18] The ability of the web to produce customized content gives it an important marketing advantage over print catalogs. Web customization can take place in either push or pull modes. In push mode, vendors tailor their messages and deliver advertising that meets certain demographic criteria. The pull strategy lets users select content based on preferences and show that content on a web site when users log on. While many individual sites offer a "My" feature for customization, a service called Octopus can also aggregate data from many sites based on user preferences.[19] Web services based on the Information and Content Exchange ( ICE ) protocol, an XML vocabulary for syndication, can easily deliver customized content over the web to subscriber sites.[20] Sites like SierraTrading.com and Amazon.com also track customer purchases and show further items in those same categories via on-site or email promotions. World Beat's research shows that generating print catalogs with customized content is feasible but takes a good deal of planning and control. When designing a catalog, any variable change in content requires a separately identified edition so the printer can change the images running on press and assemble the catalogs accordingly . Versioning in catalogs and magazines is nothing new. Top circulating publications and high-end catalogs such as Lands End or Nieman-Marcus create regional and demographic editions. An apparel catalog like Lands End sent to Florida customers in November will look considerably different than the version sent to Minnesota addresses at the same time. Agricultural publications such as Farm Journal have for some time been able to deliver segments of readership based on acreage, crop mix, and recent heavy equipment purchases.[21] Except for the agricultural publications, most print publications using complex targeting are larger publishers such as Time Inc. or Conde Nast. If World Beat plans to publish various versions of its catalogs based on demographics or past purchasing behavior, they'll need a printer with technology as sophisticated as their customer database information. However, most printing companies are small operations, with fewer than 20 employees .[22] The core of World Beat's catalog content is the merchandise copy. The company's customization strategy calls for each catalog issue to have a common set of items, plus others that vary according to the known tastes of the audience segments. Therefore, each issue of the catalog will have a number of special versions designed for the various market segments. To keep the effort manageable, however, each version of the catalog will have the same basic format; only the pages with the variable content will change from one version to the next . To keep costs for this new and more complex product under control, World Beat needs to get estimates of production costs for each version before making a decision on printing the copies. To get these estimates, World Beat needs to provide the printer with specifications early in the process. With the company using the same basic format for each issue, and with variations in content based on audience demographics or profiles, the printer should be able to provide World Beat with these estimates. A major part of World Beat's costs (or those of any cataloger) is postage. Fortunately, World Beat can take advantage of discounts offered by postal authorities for presorting and bundling the printed books according to ZIP code. By sorting the books by carrier route ZIP code (ZIP plus four), World Beat can realize even larger discounts. As a result, the company needs to provide its printer with precise sorting and bundling instructions as well as the editorial copy. Of Standards and ThingsWorld Beat concludes that it must rely on existing standards and technology as much as possible, since they don't have the resources to develop the technology, nor does the company want to rely too much on the printer to develop the new product. In short, World Beat wants to maintain control over the final product, but not go broke in the process. In the graphic arts industry, guidelines such as General Requirements for Applications in Offset Lithography ( GRACoL ) enable print buyers such as World Beat to present their specifications more comprehensively and specifically. The guidelines cover planning, design, image capture, page layout, preflighting (tests of electronic delivery of copy), proofing and related print outputs, and binding and finishing.[23] For ordering complex print products, an EDI specification from Graphic Communications Association called Production Order Specification/EDI ( PROSE ) offers standard file formats for defining these items:
PROSE also specifies supplied inserts and instructions for wraps or other items added after the publication is bound. Like other EDI specifications, PROSE requires expensive software and significant staff time to set up and operate effectively. However, a consortium of magazine publishers and printers has begun developing an XML vocabulary called XML for Publishers and Printers ( XPP ) that contains PROSE's functionality but promises to be cheaper to use because of the wider availability of XML-capable technologies.[25] Another GCA specification called Mail.Dat defines a relational database of some 14 tables for communications between the magazine or catalog publisher and the mailing facility (usually the printer) who assembles the pieces for mailing. The Mail.Dat files contain everything about the mailing except for the names and addresses themselves, and enable the printer to sort and package the pieces to take maximum advantage of business mail discounts offered by the U.S. and Canadian postal authorities.[26] World Beat has found some XML vocabularies other than XPP for print production, but no full open standards ”at least, not yet. A company called printCafe has developed a specification called eProduction eCommerce eXchange ( PCX ) for interactions among print buyers, printing companies, and third-party vendors such as pre-press service bureaus. According to printCafe, PCX can exchange data among a print buyer's enterprise resource planning system, content management tools, digital asset management systems, pre-press systems, raw materials providers, and printing companies' management systems. PCX supports processes for quotations, orders, job status inquiries, inventory, and pre-press.[27] With ebXML, trading partners can exchange messages over the web covering the entire quotation, order, production, proofing, distribution, and financial processes. A consortium of vendors in the graphic arts has introduced a draft specification called PrintTalk that supports an industry standard Job Definition Format as well as Commerce XML ( cXML ), developed by Ariba Corp.[28] In September 2000, PrintTalk released its first specifications covering requests for quotes, orders, and order acknowledgments. PrintTalk uses the Job Definition Format to define the graphic arts aspects of the exchanges, and cXML for the business factors.[29] None of the XML specifications gives World Beat all that they need.World Beat finds PCX a more comprehensive solution, but not a standard. PrintTalk has broader backing in the industry, but so far covers only quotations and orders. XPP is still in development. World Beat needs a specification that enables web-based commerce among smaller companies, defines the various catalog versions, and provides precise production instructions as well as the distribution data for mailing. What's Next?Faced with this plethora of proprietary and mutually exclusive formats, World Beat must turn to the ebXML approach to provide simple and effective interoperability. With ebXML,World Beat and its trading partners can exchange messages over the web covering the entire quotation, order, production, proofing, distribution, and financial processes. However, the printing industry will need to establish common process definitions, message formats, and vocabularies, settling its specification conflicts. If the industry can agree on common specifications and establish an ebXML-compliant registry (see Chapter 2, "ebXML in a Nutshell," for a discussion of ebXML's registry key enabling roles), World Beat and its trading partners can exchange messages, and World Beat can in turn provide its readers with more customized content, which can improve merchandise sales and reduce costs. The sequence of ebXML messages in this scenario would be as follows :
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