The Orion Holdings unit of Interpublic Group of Cos. has spun off a unit that , in partnership with Pitney Bowes, will focus on leveraging the ad holding company's global print spend to pass on savings for its clients.
Robert Hoad will oversee the unit as its global managing director, reporting to Orion Holdings Worldwide President-CEO Brian McMahon. Mr. Hoad's background is in purchasing and procurement, and prior to Interpublic he spent time at retailer Marks & Spencer and Barclay's Bank.
While social-media and digital-marketing channels are sucking up ever-larger portions of client-marketing budgets, a significant amount of ad spending is still devoted to printed marketing materials, particularly in certain markets in Asia or in Africa, Mr. Hoad said. Interpublic is now dangling as a carrot to clients the notion of cost-savings on print, which they can in turn either keep or reinvest in other marketing activities.
Asked what sort of cost savings could be attained on printed materials, Mr. Hoad said the "potential range, albeit very wide, is between 5% and 15%."
According to Pat Fogarty, VP-commercial sector leader at Pitney Bowes, consistency and risk minimization are other benefits of outsourcing print management via the new unit. "If you go from agency to agency, or even office to office within one agency, you'll see a different service level," he said. He added: "Increasingly, a lot of IPG clients are held to compliance and regulatory standards by the government and other bodies like the FDA" to be environmentally-sound in all their practices.
Though there seems to be a lot of time and resources invested into the setup of this unit, Mr. Hoad said Interpublic agencies will not be required to work with Orion Printing to create marketing materials. "It's not a mandated service by any means," he said.
Still, it's just another way that Interpublic -- which has a production offshoring unit under its biggest agency network, McCann -- and other holding companies are trying to pool their resources or outsource operations to drive down the costs of business for their big, global clients. It's also a sign of how, increasingly, cost is a primary factor in marketers' selection and retention of their agency partners.