The Guide To America's Mailstream
postal :
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All Posts Tagged With: "postal"

How Targeting & Technology Changed The Ad Game

Targeting & Technology Change Mail Game New figures from advertising authority Robert Coen show that advertisers used mail at record levels in 2007.

Mail spending rose 4.0 percent in 2007 to $60.998 billion, according to Coen, senior vice president, director of forecasting with Universal McCann, one of the largest advertising agencies in the world,

In the December 2007 issue of his “Insider’s Report,” Coen
said that advertisers spent $283.88 billion on all media in 2007, a .07 percent increase over 2006. In effect, mail continues to represent one of every five dollars spent by U.S. advertisers.

Coen said Internet advertising increased 20 percent in 2007 to $10.92 billion — about one-sixth of the dollars spent with the mailstream. Newspapers took in $42.94 billion, down substantially from the $47.71 billion spent in 2006.

For 2008 Coen estimates that total ad spending will grow by 3.7 percent to $294.38 billion. expenditures for ad mail will grow at an even stronger pace. Coen predicts that for 2008 advertisers will spend $63.73 billion advertising through the mailstream, up 4.5 percent over 2007.

The fact is that advertisers will spend more money on direct mail than on promotions through radio, newspapers, magazines, network television, cable TV or the Internet.

“Madison Avenue,” says Business Week, “came of age as a content supplier to mass media and remains much better versed in making 30-second TV spots than in exploiting the interactive intricacies of the Internet. What is more, in the same way that network TV’s dominance of media is eroding, advertising’s dominance of marketing is diminishing. Marketers are increasing their spending on telemarketing, direct mail, e-mail, in-store displays, and other forms of closely targeted, nonmedia spending.” (See: “The Vanishing Mass Market,” July 12, 2004)

For advertisers, there is a use and value for all forms of media. Each media option offers something unique, and in a country with an $11 trillion economy everyone benefits when there are numerous media choices.

But why the interest in mail?

Advertisers today want to reach specific publics. For instance, a local pizza store may want to reach everyone in a given ZIP code while a company that sells ski boots may only want to reach households with a given income level in communities where snow is common six months a years.

The availability of consumer and business data, advanced software, computers and market segmentation allow advertisers to target their messages with great precision. And when messages are carefully targeted, it becomes possible to obtain higher response rates and lower costs per sale. In other words, mail is popular because advertisers get strong returns for each dollar they spend.

Targeting offers other benefits as well.

  • With careful targeting consumers are likely to receive fewer irrelevant ads. They will increasingly receive only those ads which most closely relate to their buying patterns and preferences.
  • In an age of heightened environmental awareness, targeting can lower material consumption and yet produce the same number of sales.
  • Advertising mail is the most democratic medium of all. You don’t need a $10 million campaign to start an advertising mail program. Individuals, small businesses, charities and growing companies can all find advertising mail programs that fit their budgets — and the same is also true for unions, political campaigners, environmental groups, consumer organizations and religious congregations.

Does ad mail targeting work? You bet.

According to the Postal Service consumers read 78 percent of the advertising mail they receive, nearly 10 percent respond to offers, and 21 percent bring coupons and ad mail with them when they shop.

The new emphasis on targeting can be seen in ad mail volume:

For example, between fiscal 1996 and 2007, ad mail volume increased from 71.7 billion pieces to 103.516 billion — a huge gain, especially given the growth of email and online communication in general.

What is the future of ad mail? Given universal delivery six days a week as well as competitive pricing, ad mail offers much potential. After all, how else can you securely reach more than 148 million physical addresses?

The Check Is Less Often In The Mail

The Check Is Less Often In The MailThe check is not in the mail — at least as not as often as it used to be.

Figures from the Federal Reserve show that “the number of checks paid in the United States has fallen from 42 billion in 2001, to 37 billion in 2003, and to 30 billion in 2006.”

Whoops. That’s 12 billion checks that vanished in just five years. You can bet that the trend continues and that future reports will show even fewer paper-based checks in 2008 and beyond.

Why is this a mailstream matter? Why are postal jobs at stake? Should the Postal Service be concerned?

In many cases the reduction in check volume reflects the increased use of electronic deposits. If this means that a foreman no longer goes around the plant floor on a Friday giving out envelopes then we do not have a postal issue in the sense of deliveries and such.

But many checks are sent through the mails. It’s difficult to imagine that we have 12 billion fewer checks and no mail volume reduction. Okay, it’s impossible to imagine.

The Postal Service and the mailer community cannot undo either progress or technology. But the question ought to be asked: If the volume represented by checks — those checks that really are in the mail — is being reduced, then what new volume is being created?

This is the essential issue for the mailer community. As postal volume declines and fixed expenses largely remain, increased hard costs per piece must be absorbed by remaining users. As prices per piece rise the incentive to avoid the postal system grows.

What to do? The Postal Service needs to demonstrate why paper-based communication and exchange have value in the electronic era. There’s a good argument to be made — if only someone would make it.

One Daily Newspaper Goes Electronic — What About The Rest?

feature photoIf you’re a Postal Service executive, union leader or letter carrier you might want to look closely at the latest announcement from the Christian Science Monitor:

“The Christian Science Monitor,” says the paper, “plans major changes in April 2009 that are expected to make it the first newspaper with a national audience to shift from a daily print format to an online publication that is updated continuously each day.

“The changes at the Monitor will include enhancing the content on, starting weekly print and daily e-mail editions, and discontinuing the current daily print format.”

In rough terms, the Christian Science Monitor has a circulation between 75,000 to 100,000 papers a day. This circulation is primarily distributed through the mailstream but times are changing.

The paper says that “producing a website that can be updated 24/7 and delivered instantaneously ‘better fulfills Mrs. Eddy’s original vision’ for the Monitor to be daily than does a five-day-a-week paper delivered by mail with frequent delays.”

Let’s go to the numbers.

Imagine that the CSM has a circulation of 87,500 papers a day and most of it’s delivered by mail. Imagine as well that in a year there are roughly 260 weekday deliveries. This means a potential distribution of as many as 22,750,000 papers annually.

The real number of papers moving through the mails is likely smaller but the point is this: By going from a daily print paper to a weekly, and by shifting to a news product which is largely web-based, there is less mail volume.

This is not good for the Postal Service, not good for jobs within the postal system and it may be implausible for most newspapers.

It’s difficult to see how newspapers can win in this situation. The Washington Post, as one example, just reported third quarter numbers. Revenue from the newspaper division, said the company, “totaled $196.2 million for the third quarter of 2008, a decrease of 7% from $210.2 million in the third quarter of 2007; division revenue decreased 9% to $599.6 million for the first nine months of 2008, from $657.2 million for the first nine months of 2007.” Such revenue, after various charges, produced an operating loss of $82.7 million in the third quarter.

Now look at the Post’s online operations:

“Revenue generated by the Company’s online publishing activities, primarily, increased 13% to $30.8 million for the third quarter of 2008, from $27.2 million for the third quarter of 2007; online revenues increased 8% to $87.2 million in the first nine months of 2008, from $80.5 million for the first nine months of 2007. Display online advertising revenue grew 32% and 20% for the third quarter and first nine months of 2008, respectively. Online classified advertising revenue on declined 8% in the third quarter of 2008, and was down 2% for the first nine months of 2008. A small portion of the Company’s online publishing revenues is included in the magazine publishing division.”

By any standard $87 million in nine months is a bunch of money — but it’s not enough to fund the Post’s news gathering operations at their current level of quality, volume and expertise.

You can see the dilemma here: Newspapers need print distribution for the foreseeable future because paper-based products produce vastly higher revenues than online sites. The Postal Service needs newspapers, magazines and newsletters to continue as print publications because otherwise it will lose billions of pieces per year in volume. Everyone needs a strong Postal Service because of the jobs it represents nationwide. At the same time, declining circulation and mounting losses make print-based products increasingly difficult to justify for financial reasons.

You can bet that newspaper executives will be watching the Christian Science Monitor — at least to see if its new distribution plan has a prayer. And folks with an interest in the mailstream will be watching too. In all cases, it is in the public interest to have newspapers and magazine in print, doing what they do best, fulfilling the First Amendment obligation for a free and independent press.