Ride-Along Program Interests Publishers
Many magazine publishers expressed interest in the plan because ride-alongs generally cost 20 cents to 30 cents each, depending on the host mailing and the mailer's level of sortation. Some industry insiders, however, said the lower ride-along rates might hurt list companies or lettershops since it could potentially eliminate mailings or list jobs that they do.
The USPS' Board of Governors approved the two-year test at its meeting earlier this month. The test allows only one ride-along piece to accompany a periodical in addition to the periodical host piece charge. Currently, the cost for these mailings, which are either considered advertising space or promotional material for publishers themselves, are prohibitive. As a result, mailer copies of magazines often don't carry the inserts included in newsstand editions, and magazines can't work cost-effectively with catalogs to reach similar audiences.
The new rate, however, should open up magazine publishers to more creative advertising opportunities.
"We've been very supportive," said Cindy Braddon, vice president of Washington affairs at The McGraw-Hill Cos. Inc. "It will provide us with additional revenue opportunities and also provide additional materials for our readers."
Braddon said all of McGraw-Hill's magazine titles are interested in the proposal and some may take advantage of it as soon as it's implemented Feb. 26. Titles she mentioned that were particularly intrigued were Aviation Week, Space Technology and Engineering News.
Jim O'Brien, director of distribution and postal affairs at Time Inc., New York, said Life magazine is set to run a promotion in April with America Online in which AOL inserts a CD mailer into the mailed issues of Life.
Among the restrictions to the test is that the ride-along piece:
• Cannot weigh more than 3.3 ounces.
• Cannot exceed the weight of the host periodical.
• Cannot change the shape or processing category of the periodical.
• Must be included in all of the periodicals that are mailed.
Insiders said these stipulations were made so the publishers don't put too many items into a magazine and, thereby, dilute its value. The 10-cent rate increases if the ride-alongs don't meet these specifications.
Over the course of the experiment, postal officials will collect data to determine the feasibility of a permanent classification change. In addition, the USPS may use collected data to tweak the program once the experiment is completed, allowing for several pieces of mail to fit into one polybag, for example.
The decision was originally filed in September with the Postal Rate Commission. It received unanimous endorsements from the catalog and magazine industries, and both the Magazine Publishers Association and the Direct Marketing Association backed it. The DMA expects direct marketers will be able to reduce their mailing costs of reaching those magazine subscribers.
The experiment is expected to net the postal service $4.8 million in new revenue based on a projected gross of $10.2 million.