Postal rate hike: Threat or opportunity?

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While many direct mailers are bemoaning the latest postal rate increases, there is talk it's good news for the insert media industry.

"Like everything else in life, one can make an opportunity of a change," said Leon Henry, chairman/CEO of Leon Henry Inc. "Postal increases are a fact of our life. And fortunately for the insert media industry, the increases call attention to the savings that marketers can find by creative approaches."

At Media Horizons Management, vice president Walter Chistoni said the postal increase is a double-edged sword for insert media firms.

"It's good because advertisers will be looking for more cost-efficient ways to acquire customers and insert media will be waiting with open arms to prove itself, and I believe that once they try it, they'll be hooked," Mr. Chistoni said.

"It's bad because many insert media programs are catalog blow-ins and PIPs," he said. "If catalogs are mailing less due to postal costs, then the blow-in circulations will go down and, as a result, the PIP counts will go down. This could eventually turn into a positive because the space in these programs will have a higher demand, but all of that hinges on the results."

Al Stanton, president of Stanton Direct Marketing, said program owners who have not planned for postal increases may be in for some costly surprises.

"For the protection of the industry, both the marketer and the program owner need to work in tandem to assure that both can maintain their objectives," Mr. Stanton said. "That is not an easy task since there may be opposing objectives - lower CPMs versus raised CPMs."

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