“The recent increase in the cost of a first-class postage stamp from 41 cents to 42 cents was hardly surprising, compared to the increased in the cost of gasoline, food and just about everything else,” said the paper.

“It could have easily been avoided, however. All the U.S. Postal Service needs to do to drastically cut expenses and the necessity for several future postal-rate increases is one simple thing: Eliminate Saturday delivery.”

And why should Saturday deliveries be curtailed?

“Just think of the amount of fuel that would not be burned if mail were not delivered on Saturdays,” said the paper.

“Most people,” continued the Observer-Reporter, “communicate with friends and family by e-mail now. Many receive and pay bills online. Most of what arrives in the mailbox these days is just junk mail, anyway.”

The thought that the Postal Service could cut costs by ending Saturday deliveries is no different than suggesting that hospital expenses could be reduced if only the emergency room was shut down on weekends.

The Postal Service has a high percentage of fixed costs — all those people, vehicles and local post offices. If local post offices are closed on Saturdays it means there is less volume to support the system but many of the fixed costs remain in place — you still need a given number of people, vehicles and facilities to reach almost 150 million physical addresses.

The Observer-Reporter says “most of what arrives in the mailbox these days is just junk mail, anyway.” In other words, advertising mail.

How is paper-based advertising sent through the mailstream any different than paper-based advertising delivered by the Observer-Reporter? Would the Observer-Reporter agree that it could cut its costs and save paper if only it would not carry advertising inserts one day a week? Think of all the fuel used by delivery trucks that could be saved if the Observer-Reporter published less often. Would not such economies please owners and shareholders?

A lot of newspapers and magazines go through the mailstream. In fiscal 2007, according to the Postal Service, 8.8 billion newspapers and magazines were delivered by mail.

Many communication companies that publish newspapers also have subsidiaries to market through the mailstream. Indeed, many newspapers offer “Total Market Coverage” plans that include postal deliveries. Surely it would not be good for TMC programs if the local post office was shut down on Saturdays.

Some TMC programs are huge. The Newspaper Association of America says that 3,520,000 million piece per week are delivered in Los Angeles, 2,385,371 in Chicago and 570,000 in Miami.

If advertising through the mailstream is not effective or productive, does it not make sense that advertisers would go elsewhere? Should not the marketplace decide such issues? In fact, according to Robert Coen, senior vice president, director of forecasting with Universal McCann, the huge advertising agency, advertisers in the world, advertisers now spend more marketing through the mailstream than through newspapers.

In the December 2007 issue of his “Insider’s Report,” Coen said that advertisers spent $60.998 billion with mail marketing in 2007 versus $42.94 billion with newspapers.

Although the Observer-Reporter is surely concerned by 42 cent stamps it somehow fails to mention the rates paid by newspapers — 13.6 to 16.8 cents per piece, according to the Newspaper Association of America.

The fact is that the U.S. marketplace is vast and all forms of advertising should be welcomed and encouraged because they stimulate sales and create jobs. That’s good for the economy, good for local communities and good for readers in Washington, PA.

Technorati Tags: close, Coen, mail, newspapers, post offices, Saturdays, TMC, Total Market Coverage

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?

Technorati Tags: advertising, billion, Coen, Internet, mail, Mail & Jobs, newspapers, postal