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Having already experienced enormous change in the last few years, billboard printing is primed to undergo another wholesale transformation in the near future.
A cutthroat, cost-slashing move by an industry leader earlier this decade shook the industry to its core, in the process driving out approximately 80 percent of the printers who served the market on a national basis. The remaining companies are girding for another painful period of transition, as new technologies alter the inks used and the substrates favored to create billboards.
One leader in billboard printing reports the dizzying changes in his field have been highly challenging, but not daunting enough to convince him to leave the billboard market. "The most important part," said Jittu Sarna, president of Dallas, TX-based Inkjet International Ltd., "is to be able to adapt the economies of your operation to the much lower prices now being charged."
Before we examine Sarna's story, let's take a look at the billboard segment's place— first as part of outdoor signage and, second, as part of wide-format graphic applications as a whole. According to Hanover, MA-based I.T. Strategies, the total market for wide-format graphic applications in 2006 was $32.4 billion. Of that total, 38 percent or $12.2 billion was represented by outdoor applications.
Significant growth was seen in outdoor last year vis-à-vis 2004, when the total retail value of outdoor output was $26 billion. Much of that growth, I.T. Strategies says, has come in "outdoor advertising beyond billboards," including alternative media, building wraps and street furniture applications that have greatly expanded the market.
Billboards comprised 13 percent of the outdoor market in 2006. The retail value of billboard printed output was just under $1.6 billion. That figure represented a total of about 1.7 billion square feet, for an average price per square foot of 94 cents.
That number was the lowest price in outdoor, substantially trailing the average per square price of transit and event signage, as well as vehicle wraps, fleet graphics, building wraps and other fresh-air applications.
Talk to the president of one large billboard company, and you're likely to gain a less than upbeat assessment of the billboard marketplace.
"Over the years we've branched out into other aspects of wide-format printing," Sarna said. "Three or four years after we were founded, in 1999 or 2000, we entered the banner market. With the evolution of technology into flatbed and rigid technology, we've begun producing rigid substrates, printing onto acrylic, aluminum, and Styrene. These are usually point-of-purchase items."
Noting "the profits have really evaporated in the billboard market," Sarna reported that after one dominant player decided it wanted to control the billboard market several years ago, prices dropped from $1.25 down to as low as 50 cents per square foot. To survive at that price point, billboard printers must have exceptionally large volume and an array of printers. Predictably, the ranks of billboard printers have plummeted from 50 or 60 four years ago to less than a dozen today. And the number of billboard printers that can produce 50 billboards a day has nosedived to single digits, Sarna says.
A Commodity Market
Billboard printing has always been done on vinyl substrates, Sarna reported. But today there's considerable discussion about the industry's anticipated move to 100 percent recyclable polyethylene sheeting. While environmental concerns are a factor behind the move, a bigger one is the effort to find economies that can help billboard printers remain profitable in a lower-cost environment. Polyethylene is cheaper.
But polyethylene sheeting is not without its problems. The product simply does not conform 100 percent to the needs of the billboard marketplace.
For one thing, the tensile strength associated with vinyl is missing in polyethylene sheeting. For another, size is an issue. "You need to have up to five-meter widths of that product, which 100 percent recyclable product doesn't offer," he said.
Another problems is that polyethylene sheeting can't be used without first coating the substrate with chemical coatings that permit printing with solvent inks. But adding coating immediately negates the benefits of polyethylene. "Those benefits are the lighter weight, which is about one-quarter of vinyl's weight," Sarna reported. "If you put the coating on the cheaper 100 percent recyclable, you raise the price right up again…Without coating, you need to use UV inks. But there are not too many manufacturers who have UV inks at a decent enough cost to print on PE sheeting."
Despite these significant obstacles, Sarna believes the transition from vinyl to polyethylene sheeting is certain to occur in the not-too-distant future.
"One of the manufacturers in the market is offering machines that print at tremendous speed, and have technologically advanced the coverage to use UV inks and cover a much larger area," he reported. "Once it does that, the per-square-foot price of using UV inks comes down, and it's very close to the price of using solvent inks…This is a very major technology change. In the printing industry, it takes a while, though it does happen. But in the billboard market, going away from vinyl and solvent inks will be a very major change."
Still, he asked, "Who in their right mind is going to invest hundreds of thousands of dollars in machines to come back into a market that has become a commodity market? Billboard printing today is a commodity."
Despite being in their right minds, the folks at Inkjet International are likely to be among those investing in the new technology to use UV inks and remain competitive.
The billboard marketplace is, Sarna said, "where we started, and we're going to stay there. We know this billboard market very well. And we have long and outstanding relationships with our existing clients, who depend on us to meet the price point, deliver the quality and provide the turnaround time they've expected for years."
More Rapid Turnarounds
There was a time when billboards stayed up for months, or even a year or more. Those days are gone. Advertisers are no longer interested in keeping their outdoor advertising messages up for 12 to 18 months. Today's marketing methods call for advertising messages to go up quickly and be changed fairly expeditiously.
Not only can printers turn billboards around more rapidly, but the medium's much lower prices make it possible for advertisers to change their messages every six weeks to six months. Billboards were already the cheapest means of advertising before the swift price decrease, and the price reductions have just made them all the more cost effective. In such an environment, there's no reason for billboards not to be changed.
That doesn't mean, however, that billboards have become less sturdy as prices and turnaround times have declined. "When you print the billboard, the advertiser has to pay the outdoor company to put it up and take it down," Sarna says.
"Flimsy will not do the job. The billboard could fall off onto a car, or tear off. If something doesn't hang up properly, or the billboard is installed correctly, it still is seen as the fault of the printer. That's the negative part of being in my shoes."
With billboards being turned more quickly, the capacity and total volume of the industry has increased tremendously over the years. Printed square feet continue to rise year after year, and printers that have chosen to stay in the billboard segment have had to print far more to keep their "scale of economy aligned," Sarna said.
With technological advances has come the need to adapt. Those shops that were not able to adapt to the changing realities of the business migrated to other types of printing or simply closed shop. Of the five dozen printers who formerly comprised the billboard industry nationally, most migrated to what Sarna calls "higher resolution tentacles of the industry."
Inkjet International has perfected the printing portion of creating billboards, and has learned from its mistakes along the way. "Either you go away from it, or you attempt to conquer all the obstacles in your way," Sarna observed. "We opted for the second option. We enjoy it, we enjoy what we do, and we are one of the largest billboard printers in the country. It's not easy—and it's not easy to stay there."
Jeff Steele is a freelance writer who specializes in the field of business management, marketing, and protocol, especially as they apply to wide-format printing firms. Contact him at scribsteel@americom.net.
author: BY JEFFREY STEELE