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Internet Revenues--Showing Up Just Isn't Enough

November 1998
Web money-makers push the technological envelope.


Ask 100 non-computer-technology-related companies why they have a Web site, and 95 will probably respond, "To have a presence on the Internet."

Those respondents are in good company. At least 3 million Internet domain names have been registered under .com, .net and .org. Network Solutions, which has registered 75 percent of all domain names worldwide, reported a record 443,000 net new Internet domain names in the second quarter of 1998, up 91 percent from the second quarter 1997 total of 232,000 names and 30 percent from first quarter total of 340,000. Cumulative net registrations billowed from 1.04 million to 2.29 million between June 30, 1997, and June 30, 1998.

That is a lot of presence.

As a result, the search engine, once touted as the chief tool to finding the information needle in a cyber haystack, has itself become a haystack. Yahoo!, for instance, lists nearly 350 companies under the commercial printing search. Under production services, there are 37 listings. For business forms printing, there are 40. Yahoo! is but one search device, and production services and business forms are only two categorical branches of a technology that is now deeply rooted.

Given that search engines will only become more and more populated, featuring layers upon layers of categorical subdivisions, the "me, too" attitude toward hosting a site will not make the grade for companies that harbor hopes of their domain generating revenue. After all, if a phone book featured 350 plumbers, it's a safe bet some would receive few or no calls, as the choices are too numerous.

Those printers lucky enough to lure stray, potential customers to their Web sites should give these visitors a reason to stay, come back and, finally, pick up a phone and call.

While selling commercial printing directly over the Internet is a concept yet to be embraced by the industry at large, some of the leading printers are showing the way in terms of innovation. One of those leaders, R.R. Donnelley & Sons, of Chicago, has found several avenues for providing Internet commerce.

Match Made in Internet
Select Source is an electronic commerce solution from Donnelley that integrates catalog merchandise into specialized Web sites. The idea behind it, according to Donnelley Communication Manager Vera Panchak, is to marry catalogers with germane editorial on high-traffic Web sites. It is only fitting that one of the first matches Donnelley made was with the Wedding Channel's Web site, combining wedding-related editorial with catalog products.

"Obviously, there's some linkage with our own catalog customers and helping them repurpose their content," Panchak remarks. "Some of the Web sites this content is integrated into are iVillage, the Wedding Channel and HouseNet. As we're tracking this, our model is showing us that we're successfully converting online browsers to online shoppers at a faster rate than banner ads on the Web are doing."

Donnelley has taken it a step further with HouseNet, which is the company's own community of interest site. HouseNet is aimed at home and garden buffs who exchange ideas and, ultimately, purchase products and services relating to home improvement and gardening.

HouseNet provides additional distribution channels for content from magazine and book publishers, according to Panchak. "The publishers who partner with HouseNet are able to build their online brand and get new revenue streams because they share the advertising revenues from HouseNet," she notes.

With as diverse a media outlet as the Internet, Panchak feels there are unlimited possibilities for the printing industry in terms of online commerce, including selling printing. She says the company is exploring various Web applications.

The main objective, says Panchak, is to give the visitor a reason to return.

"In the broadest sense, our goal would be to leverage the most effective technology in order to communicate our industry leadership and company value to customers, investors and employees," Panchak says. "We just underwent an upgrade that we launched in June and we believe we exceeded our goals for the redesign. It doesn't end the process because we're already undertaking the next phase of the redesign."

Invisible Bottom Line
Not all Web sites leave a crystal-clear dollar sign impression in the profit ledger. Mark Tennant, vice president of electronic imaging and new business development at Los Angeles-based Anderson Lithograph, feels his company's site has helped generate revenue in ways that are not readily apparent.

"We certainly have people who use it as a resource and then contact us from that, but to say we generated x amount of dollars from having it is tough," Tennant admits. "I think we have a unique set of tools—many links to industry organizations and also links to our clients' sites. We have our own co-generation power plant and we get a lot of hits from people just inquiring about co-generation." Anderson's co-generation power plant renders the company's VOCs harmless while producing 5.1 million watts of electricity.

Tennant sees Anderson Lithograph utilizing the Internet more in the future for functions such as billing and information transfer. He says the company already boasts request-for-quote capabilities from its salespeople, who can send quotes remotely to have them generated. Anderson also enjoys full T1 lines and digital file transfer to accomodate client jobs.

Customization challenges and the unique needs of each printing job may be the biggest stumbling blocks facing the sale of printing online, but at least one company is using its Web site as an opportunity to gather even the most minute information to provide quotes to potential customers.

Daniels Printing, of Everett, MA, boasts an elaborate online quote processor. When completed, the electronic form is routed to the estimating department and then assigned to a sales associate.

Eric Guz, manager of prepress technologies at Daniels, likes the convenience the estimate form offers browsers.

"It's a great way of getting people you've never worked with before to notice you as a printer," Guz says. "We have satellite offices in New York, Boston and Washington, DC, and even our salespeople there can fill out a form rather than pick up a phone and call into an estimator, who may be hard to reach."

Salespeople can have in-office customers fill out the electronic quotes, then call the main office and report that the quotes are their sales leads.

The site has helped enhance business with existing clients, Guz notes, as has another online feature, its Media Asset Management System. A fully Internet-based, Web-based browser for media asset management, Guz believes the system will be Daniels' primary Web commerce producer.

The system works as an information bank for print customers. Once a client has an area set up within the asset management system, an information warehouse of sorts, the customer can log in and access any digital files created and uploaded into the system. The client can then give other vendors/printers—even Daniels' biggest competitors—the ability to access images, layout programs and applications based on user privilege.

"We've come to the point in the printing industry where we've decided that we're no longer just an information outsource on paper. We have to manage information on a digital scale as well," Guz notes. "Our new corporate motto is 'Communicate without limits, anyone, anywhere, anytime, and anyway.' "

New Song and Dance
Arandell Corp., Menomonee Falls, WI, has decided that communicating through the Internet requires some limits. Too many companies put useless information on their sites. Arandell took precautionary steps against this when constructing its Web pages. According to Jim Treis, executive vice president of sales and marketing, the printer polled and researched its clients in search of the information they wanted to see, "as opposed to having a status site, a glorified brochure." Current technology, news and trends in the marketplace—such as direct-to-plate and mailing issues—were the leading topics selected by Arandell clients.

While Arandell's Web site gives clients what they want to read, Treis is concerned that there aren't enough customers online to see it. He estimates that only 35 percent to 40 percent are connected.

"They have Internet access at home, but they don't have it at work," Treis says. "From a corporate standpoint, many companies have a problem, worrying that their employees are going to be surfing all day, so they haven't been that free to opening up Internet access to their employees."

Most sites don't give browsers a reason to visit. That should change as more users get online.

"When there's more Internet access and more ways to bring in the pipe, you'll see more [interactivity functions]," Treis believes. "It has a lot of potential down the road in terms of a retrieval standpoint."

Panchak also sees more potential in the Internet, especially for printing companies that, as novices, still haven't learned to push the Web to the limit. "As people get into this medium, they're discovering it's a constant process of improving and changing," she says. "We all have to remember that the medium is really only about two years old, and many people are still learning what to do with it. Certainly, the big consumer companies with a lot of ad revenues are further along the curve than smaller companies or business-to-business industries. But we'll all catch up, eventually."

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