Northprint branded a success, despite 60% drop in visitorsI read once that advertising is the tax you pay for a suboptimal product. Google is the "No 1" brand. When was the last time you saw an ad or got a direct mail piece for Google? Microsoft is the No.2 Brand. I think I saw some Microsoft ads on the TV just the other day.
Simon Nias, From printweek.com, 28 April 2009
Last week's Northprint trade show passed muster, according to visitors and exhibitors, despite a significant drop in the numbers of both.
It's the difference between a value chain economic model and a user network economic model. In a value chain, you make Your platform ubiquitous then charge rent for using it. In a user network economy your users make your platform ubiquitous, then you charge other people to keep it afloat. People who have money willingly give it you, because the value is the network.
The Microsoft model was awesome in a world of information and software scarcity. They built the best software to manage information. But that was then, this is now. Information is not scarce. Software is not scarce.
What is still scarce are big enough server farms and printers. Both of those installations make it easy (for those who have the people and stuff) and hard (for those that don't.) The most reliable way to get to decent margins is to exchange "easy for me, hard for you" for money or attention.
That's why the printernet could get to good margins. That's why Google can invest it's money in continuous focused product development without wasting much money on blablabla advertising. It's also the reason that most printers are completely correct in resisting the marketing pundits' call to do "marketing."
Everyone knows that what creates new business is word of mouth. Everyone also knows that what creates great brands at the very minimum cost is the expectation of better products in the future. It's the reason Apple is so very cool. No doubt in order to get a decent margin on a dressed up commodity MP3 player, advertising has some role to play. But if the iPod didn't deliver even more than it promised, that would have been money flushed down the drain, instead of getting great margins.
Consider the brands of the players in the Print space. Which vendor delivers more than they promise and can be expected to do so, month after month, year after year? HP? Xerox? Kodak? Oce?
I come from commercial print, so I don't know how this plays out in MPS. But in commercial print, the view from my little constrained corner of the world, focused continuous product improvement is EFI, CREO and the folks at Xerox who do the special paper stuff.
The other source of continuous growth and improvement in Print comes from outfits like Sandy Alexander, The ACE Group, Motherall Printing, National Bindery and BOPI. The only one that sent me a direct mail piece is BOPI. I don't remember if I read it. But I did once fly out to Bloomington to see their operation. The boss and the sales manager both had exactly the right DNA.
Focus and the right DNA has a marginal cost of zero.
If your marginal cost is zero, once you make your nut, you can earn good margins and build a brand that is not subject to "impairment costs," whatever that's supposed to mean aside from a book keeping entry. Nor do you have to "defend your brand" from silly adolescents posting YouTube videos or disgruntled employees starting viral screeds on the blablabla o sphere.