The Visible Solution
BY DARIN PAINTER
January, 1999
Many distributors say using holograms as a security feature costs a fortune. That doesn't have to be the case. FORM goes inside one of the industry's most useful-and least understood-security features.
In the past two years, 26 distributors have called Information Central, DMIA's members-only Source Hotline, with questions about holograms. Most of those distributors pitched hologram solutions to their clients. But only two actually sold projects that included holograms. Why? Clients were open to the idea of using holograms, but backed away when they were told how wide they would have to open their wallets.
Since holograms were first introduced as a document security feature in the early 1970s, they've seemed to carry the motto, "Neat, But No Way." Holograms' success at thwarting fraud has been difficult to dispute-their physical properties make them impossible to dupe on desktop publishing equipment. And their visual appeal has been tough to question-who doesn't think they look cool? But their high prices have caused many projects to melt before they've begun.
For that reason, holograms have been used in the printing industry mostly as marketing tools, as promotional eye-catchers on products such as cereal boxes and wine bottles. But industry experts say that today, as counterfeiters become increasingly sly, the hologram's high level of security is becoming more attractive to customers fighting fraud. And fighting they are: According to the Counterfeit Intelligence Bureau, based in London, counterfeit products account for about 5 percent of the world's trade, or around $80 billion. (That's equivalent to about one-third of Canada's gross national product or the combined 1996 sales of IBM and Ford.)
Holograms are now used to secure a wide range of products, including event tickets, certificates of authenticity, ID badges and tags and federal currency in at least six countries. Most people, in fact, have one in their pockets: Visa and MasterCard have included holograms on every credit card they've issued in the past 12 years. But distributors and manufacturers agree that holograms often are rejected as security solutions because they are thought of as complex and costly.
These concerns have merit. Custom holograms require precision and multiple production stages. The process involves these steps: designing a hologram; creating camera-ready artwork for a holographer; waiting for that holographer to create a "master hologram," which must be sensitive to laser light; silvering the master hologram and creating a nickel "grandmother" shim (or embossing dies that carry holographic information); including a step-and-repeat tooling stage to make the image efficient to run; electroforming the embossed shims; microembossing those shims into metalized polyester; applying pressure sensitive adhesive or hot stamped size coatings to the embossed material; and applying the hologram to the product. That makes for a pricey product that involves lots of manpower.
But security holograms don't have to cost an arm and a leg. "It's easy to see why the stigma of high price exists," says Peter Scheir, president of A D 2000, a manufacturer in New Haven, Conn., that produces holographic products. "The set-up costs for custom holograms are generally very high, and the lead times for custom holograms are generally very long. That's why many potential users of holograms have been turned off. But it's a misconception to think that a really good hologram has to be really expensive or take too long to produce."
Industry experts say the key to offering affordable security holograms is to use a stock hologram and customize it, thereby eliminating origination costs that come with custom holograms. A D 2000's HoloBank® offers distributors more than 500 stock images, which can be altered so end users get the feel of a custom product for the price of a stock one. Here are four solutions distributors use to offer high-level security while saving their customers time and money:
Etched Imprinting
DESCRIPTION: Distributors pay a one-time fee (typically around 15 to 25 percent of the price of a custom project) to incorporate a logo or text onto a stock hologram. There are two types of etched imprinting: defractive etched printing, in which a defractive rainbow image of the original artwork is embossed into the hologram; and matte etched printing, which utilizes the same concept as defractive etched imprinting but appears to be sandblasted into the hologram's surface, making it easier to read. Etched imprinting is generally cost-effective for orders of more than 10,000 holograms.
Sam Tocker does most of his business in ad specialties and commercial printing, but he says he's proud of a security hologram project he completed. An international gemology laboratory that determines the validity of precious stones asked Tocker, president of Custom Graphic Services Inc., a distributorship in New York, to enhance the security of its certificates of authenticity. The certificates, laminated 8 1/2 x 11-inch trifold brochures with custom borders, screens and a tamper-safe background, were supplied by another distributor.
Tocker says the laboratory wanted to improve its position in the gemstone verification market and wanted a security feature that would make a lasting visual impression. Tocker supplied 40,000 stock holograms in the shape of a grid in space. The lab's 3-letter logo was etched onto the hologram, which appeared in the lower left corner of the certificate.
"If they would have chosen something more subtle, it wouldn't have been as effective," Tocker says. "Now, they're growing healthily and beating their competitor by looking like the most distinguished gemology lab in the niche." The lab has placed six reorders.
"Of all the security measures I can think of, holograms are going to have the most growth in the future," Tocker says. "As technology improves, so do the people getting around that technology. They're forging documents faster and cheaper, but they're not going to get around this one."
Joanne Mabie, an estimator at RPJ Associates Inc., a distributorship in Wellesley, Mass., also made a client's project safe by using etched imprinting on a stock hologram. The client, a convention planning group, wanted to issue secured ID badges to attendees of trade shows across the country. RPJ supplied a stock hologram in the shape of a sunburst. Mabie had the planning group's slogan ("Breaking the Performance Barrier") etched onto the hologram.
"It made them feel like the hologram was theirs," Mabie says. "The customer wanted to save a little money, so it was a good idea to use a stock image. When you look at it, it just makes a lot of sense."
Thermal Imprinting
DESCRIPTION: Distributors pay a one-time fee (typically around 1 or 2 percent of the price of a custom project) to imprint a black-and-white logo or text onto a stock hologram and then pay a per-piece charge. This makes thermal imprinting cost-effective for orders of less than 10,000 holograms.
In 1996, a cologne manufacturer approached Dennis Delphus, vice president of Diagraph of Florida Inc., a distributorship in Miami Lakes, Fla. The manufacturer wanted a product that shoppers immediately would recognize as real because cologne fraud is a growing problem. Delphus, who specializes in commercial printing, labels, multipart continuous forms and tags, had never worked on a hologram project. "I knew they were an excellent deterrent against fraud," he says, "but I also knew the set-up costs for truly custom projects are horrendous."
Rather than pay for those costs, he decided to use custom imprinting. Delphus supplied a stock hologram in the shape of a globe; the cologne firm's logo was imprinted on the hologram via thermal transfer printing. "I ended up saving my client a lot of money," Delphus says. "The general public thinks holograms have to be custom in all aspects. They think, 'Oh, holograms. They're nice but too expensive. I'm not going to touch them.' In reality, no one investigates. If they realized how affordable they can be, more people would use them. The truth is, distributors can get stock hologram designs, give them a custom feel and do it for an affordable price."
Because holograms are eye-catching, Delphus now uses samples of the project to attract other printing business. "When we show [prospective clients] the project, they think of us as a high-tech, professional company. They think highly of our work," he says.
Security Additions
DESCRIPTION: When the application necessitates an extra security feature, such as sequential numbering, a tamper-evident adhesive or a special die cut shape, distributors start with a stock hologram. Then, during the end of the production process, sequential numbering is added, tamper-evident adhesives are applied and die cut shapes are cut out of the hologram.
Delphus says the availability of stock holograms is the main reason he's able to sell security documents. Since Diagraph of Florida began in 1966, its specialty has been supplying custom labels and tags. In the past few years, the company has targeted Latin American companies. "Distributors should recognize that the fraud problem is a worldwide problem," he says. "Many countries have a huge problem with organized counterfeiting groups and look for companies like us to give them security."
Last year, a city in Venezuela asked Delphus to enhance the security of its vehicle inspection tags. The city, which requires all licensed drivers to display hang tags proving their cars have been properly inspected, was having a problem with forgery. Delphus told city officials he could supply a hologram with a tamper-evident adhesive so they could stick the hologram to the inspection tags.
The city agreed. Delphus supplied 8,000 secured tags to the city. A stock hologram of a globe was affixed to the tags. The tags also included a small calendar around the border in which months of the year were written in Spanish. City officials punch holes in the tags to indicate when the car needs to be inspected again.
"The beauty of stock holograms is that the holograms don't lose anything as far as security is concerned," Delphus says. "And distributors can add practically anything to print on the hologram itself. You want your name on it? No problem. A logo or a message? Sequential numbering or a bar code? That's easy."
Stock Holograms without Alteration
DESCRIPTION: Distributors in need of a quick and secure solution buy a stock hologram and make no changes to it.
In May, a law firm in California was undergoing numerous changes. It was adding branches, employing a new management partner, implementing a new accounting system and upgrading its office equipment. At the time, the law firm issued 8 1/2 x 14-inch payroll, accounts payable and accounts receivable checks that included minimal security. Some of the checks were stolen, forged and cashed.
Dineen Lucido, business consultant for Monarch Business Forms, a distributorship in Pleasanton, Calif., received a worried call from the firm. "After going through so much change, the fraud hit them hard," Lucido says. "They were going to do anything to make sure nothing like that happened again." She had the checks printed on Boise Cascade's CheckProtect paper, which features fluorescent fibers, an artificial watermark, chemically reactive dyes, a brownstain "VOID" sign and Toner Grip, a surface treatment that yields greater toner adhesion to thwart forgery attempts.
But Lucido wanted to go beyond conventional security measures. She called Pro Forms, a manufacturer based in Visalia, Calif., that recently introduced Tamper Safe, a laser-compatible stock 3-D hologram in the shape of a silver circle that reveals different words (such as "SAFE") when viewed at different angles. Nancy Phillips, CFC, marketing manager at Pro Forms, says, "Holograms are at the top of the list for security, but they don't have to be at the top of the list for price. They should be available to everybody."
Lucido added the hologram to the top of the law firm's checks, between the address and the Arabic numbering. "It was an easy sell because the client understood the value of security and they were already going through a lot of changes," Lucido says. "It was a logical time to add security, and holograms were a great way to do it. Plus, it was fast. I just needed a stock hologram, and that was it."
Lucido says she used to suggest other security features, such as bleedthrough numbering and MICR lines, but most security papers have those built-in. In order for clients to distinguish themselves, she says, holograms are their best option. "Could more distributors offer holograms? Absolutely," she says. "It's surprising to realize how many don't suggest them, especially when you know how easy it can be."
Darin Painter is an assistant editor at FORM Magazine.
In Perspective: The History of the Hologram
1947--British/Hungarian scientist Dennis Gabor develops the theory of holography while working to improve the resolution of an electron microscope. Further development in the field was stymied during the next decade because a proper light source was not available to produce holograms.
1960--The laser is invented. Its pure, intense light is ideal for hologram production.
1962--The first 3-D images (of a toy train and a bird) are created by two University of Michigan scientists. Laser light is required to see the images. The project leads to the standardization of holographic equipment.
1971--Gabor wins the Nobel Prize in Physics for his discovery 24 years earlier.
1972--The first holographic stereogram is produced by Lloyd Cross. He combines white-light transmission holography with conventional cinematography to produce moving 3-D images. Around the same time, holograms begin serving as anti-counterfeiting devices.
1980--First Light Impressions, a company in Spokane, Wash., introduces embossed holograms.
1981--An Italian wine manufacturer, Figlia de Liberta, uses the first holographic label for its Spumasta wine.
1985--National Geographic magazine commemorates the discovery of a prehistoric human skull by including a hologram of the skull on its November cover. The issue sells 14 million copies and attracts more ad pages (54) than any issue in its preceding 25 years. The publisher produces enough holograms of the skull to stretch from Chicago to Pittsburgh.
1986--Visa and MasterCard include embossed security holograms (Visa uses a dove and MasterCard uses a globe) on their credit cards. The worldwide hologram market nears the $100 million mark.
1996--An international counterfeiting team is arrested after trying to duplicate a hologram that was on packaging for a brand of Turkish tea.
1998--The Worldwide Cigar Security Company announced it will soon include security holograms on boxes of frequently counterfeited cigar brands.
2005--Experts predict that future holographic security will not consist of mass-produced, identically embossed holograms. Instead, each will be unique, bearing an encrypted "signature" whose validity will be checked electronically.
Learning the Basics
What's a hologram? Holography is the process by which 3-D visual information is recorded, stored and replayed. A hologram refers to the flat "picture" that displays a multi-dimensional image under proper illumination. Unlike any photograph, a holographic image has a "parallax" (the ability to see from many angles) and depth.
How are holograms made? Holograms are made using precision optical instruments and special photosensitive materials, which are exposed with laser light. After the first hologram is made in the lab, the holographic image can be copied repeatedly on a variety of formats, depending on the intended application.
How do holograms work? When a beam of light strikes a hologram at the proper angle, a multi-dimensional image appears. Direct sunlight or a single overhead spotlight is the best way to illuminate holograms with deep imagery. Embossed holograms, with their shallower imagery, can be viewed when lighting is less than ideal.
What's an embossed hologram? Embossed holograms are the type used most in security applications. For large runs of holograms to be produced in a cost-effective way, a method was developed to emboss complex microscopic patterns onto rolls of very thin plastic or foil materials. Light interacts with these patterns to create holographic images. There are three different types of embossed holograms: 3-D holograms display a three-dimensional image that looks identical to a "solid" object. The viewer can look around the top and sides of the image as if the actual object was there; 2-D/3-D holograms have a multi-level, multi-color effect. The images have one or two levels of flat graphics "floating" above a hologram. Background artwork seems to be "under" or "behind" the hologram, creating the illusion of depth. They can be viewed under a variety of light sources; and stereograms originate with cinematic footage that is processed holographically to create a movement effect.
Why are holograms used for security? Holograms belong to a class of images known as Diffractive Optical Variable Image Devices (DOVIDs). They can only be produced by using expensive, specialized and technologically advanced equipment. They can't be replicated by color copiers, computer scanning equipment or analog or digital printing. Given that counterfeiters usually choose the path of least resistance, a security hologram will likely cause them to move to easier targets. Security holograms also are the most visual DOVID, making them easy to see when checking a document's validity.
Source: Holographic Dimensions Inc., a supplier based in Miami
When Custom is the Best Option
Although the cost of a custom security hologram is high, distributors say that solution is still preferable for end users who face a huge potential loss if their documents are duped. A client who wants to limit entrance into a social club requires a different level of security than, say, a government that wants to protect its currency.
Distributors and manufacturers say the required level of a document's security depends on several factors, including the product's perceived value, the potential monetary loss if the product is forged and the likelihood that a counterfeiter would go to extremes to copy the product and the hologram. Peter Scheir, president of A D 2000, a manufacturer in New Haven, Conn., says, "A useful analogy might be this: To determine the height of a fence needed, you must consider whether its purpose is to keep school children from trampling the flower patch or to thwart professional mercenaries hired to steal your gold."
Joaquin Santamaria, marketing manager of Quick Tick Intl., a distributorship in Houston, began supplying holograms six years ago to concert promoters of the Grateful Dead. "At first, it was just a way to add color to the tickets," he says. "But we soon discovered holograms were perfect for guarding against counterfeiters." The tickets included 1/2 x 1/2-inch holograms in the middle as well as a hologram strip on top. "They were a huge success, and we began looking for new outlets to offer security to," Santamaria says.
Quick Tick now includes custom 3-D security holograms on tickets for worldwide concerts, entertainment venues and sporting events, including World Cup soccer matches, Brazilian festivals and university athletic games. The tickets, which are printed with sequential numbering and invisible ink, include Quick Tick's logo. "You don't have to improve your client's image; you can improve your own," Santamaria says. "People see the logo and know their tickets are secure."
Santamaria says the counterfeiting problem is too large for distributors to ignore. He says that three years ago, a festival at a Venezuelan Air Force base was raided by 170,000 people with counterfeit tickets. When Santamaria showed the festival's organizers the power of security holograms, the organizers switched to Quick Tick and began a promotional campaign promising no future fraud problems.
Another market that often requires custom security holograms is the computer software industry. David Duysen, president/owner of BPM, a distributorship based in Emeryville, Calif., says software companies use holograms as an anti-piracy device on packaging and authenticity certificates. "Microsoft basically started the trend," Duysen says. "Once they did it, everybody wanted to jump on the bandwagon."
Duysen "wasn't providing much" to an international Internet provider, but that changed when he offered holographic security. The Internet provider wanted a stereogram (a hologram that appears to move when viewed at different angles) that matched its logo and could be included on the company's software packaging. "Stock holograms really weren't an option because cost wasn't much of an issue to the client," Duysen says. "That's because the potential loss of anti-pirating that software was incredibly high. Don't get me wrong, the cost of custom holograms is certainly nothing to sneeze at. But you have to consider what the customer needs and what the customer might lose if their products are pirated."
After the hologram project, BPM began supplying the Internet provider with envelopes, brochures and registration cards. "Custom holograms can be a great door opener," Duysen says. "But if you decide to [pitch a custom hologram], it's a good idea to be prepared to talk about securing a specific application instead of just providing security. A big company is going to ignore distributors who say things like, 'I can give you security.' But they might listen to you if you say, 'We have a great way to take care of piracy and improve your image at the same time. We want to add security holograms to your certificates of authenticity.'"
