Worries Persist Over Ad Mail
For example, NBC, the recipient of a letter testing positive for anthrax, is not accepting any mail from the post office. CBS is following special instructions when opening mail. Mail for the Capitol in Washington is being sorted elsewhere.
"Some companies are saying they're bundling advertising mail and may not distribute that mail within the company, so if that becomes a common constant, that could have very, very damaging implications for our industry," said Ron Greene, president/CEO of Devon Direct Euro RSCG, Berwyn, PA.
The anthrax threat has tremendous ramifications for the BTB direct mail segment, particularly for response rates. According to the Direct Marketing Association, BTB marketing last year accounted for $201.9 billion in sales by direct mail and $17.1 billion in advertising expenditure.
"Sixty percent of all BTB marketing in direct mail is lead generation," said Michael Faulkner, the DMA's senior vice president of segments and affiliates. "So if there's an impact, it's going to impact them more later on, because if it was a direct order, it would impact them sooner."
As expected, clients are starting to call agencies to check on security measures in place for producing and handling mail. But campaigns are not being pulled, at least not at big direct marketing agencies like Wunderman, Devon Direct and Rapp Collins Worldwide.
"We've recommended to clients not to pull campaigns because it's an overreaction," said Lesley Mair, president/CEO of Rapp Collins Worldwide's New York office. "I think it's really important to keep a sense of perspective. Being sensible is a good thing."
Still, taking a proactive approach, Devon Direct sent a memo to clients like Nextel, VeriSign, Sun Microsystems, Enron Corp. and GMAC Mortgage about measures it has taken and recommendations for future campaigns.
None of Devon Direct's clients has pulled a campaign, though one did call with security concerns about the production and transportation processes.
"We typically go right from a lettershop to a postal substation or directly to the post office, so we're not using any independent transporter or trucker," Greene said. "We're not commingling mail programs and utilizing anything other than official U.S. Postal Service trucks."
In the memo, Devon Direct said it has asked its vendors to review their own internal security procedures. Those that do not institute policies ensuring the integrity of agency mail programs will not requalify as Devon Direct vendors.
"I think that potentially the weakest link would really be at a lettershop, where materials are assembled and eventually sequenced and inserted into the envelope," Greene said. "I think it's at this point where it's possible -- despite the high-speed insertion that's utilized -- that at that point something could potentially make its way into an envelope before it's sealed."
Meanwhile, lettershops are not sitting idle. Consider Fala Direct Marketing, whose business is derived equally from ad agencies and companies in financial services, telecommunications and insurance. The Melville, NY, firm is researching ways to allay legitimate concerns.
"We've got calls from almost every client, asking us what are the steps that we're taking," said Richard Arnold, Fala's vice president of sales for the Mid-Atlantic region. "I'm not so sure that it wasn't driven by the DMA's statement that they made on their Web site.
"But in doing that, obviously, what we're doing is we're researching the opportunities to ensure that no work leaves our facility with any compromising material or whatever," Arnold said from his Richmond, VA, base.
A consequence of the anthrax incidents is the jettisoning of tried-and-tested direct mail tactics. Devon Direct will not use restrictive kinds of marking like "Personal." Greene expects that other shops also will stop using tactics like misspellings, excess postage stamps or those applied on a bias.
"At other times, those might have been techniques that legitimate mailers might have used on the outside of the envelope to get attention and, in many cases, response-enhancing," he said. "That today needs to be obviously eliminated or very carefully used so that the mail is expected and identifiable."
The agency recommends that clients not use postage stamps. Instead, postal indicia -- a four- or five-lined postage permit -- are suggested, as this can be traced.
And if Devon Direct's clients prefer metering, Greene suggests they include an identifying phrase or statement. This communicates to recipients that the item has been sent by the marketer.
"Being open about who you are is an appropriate response," Rapp Collins' Mair said. "With the kind of clients we've got, they're proud of who they are, and they're not going to disguise that."
Greene said the challenge is to find other response-enhancing techniques.
"On the short term, we're already seeing a decline in the credit card, technology and financial services response rates," he said. "On the other hand, we might see an uptick in the telecommunications industry. I think just now people are rethinking their telecom applications. Mailings targeting business segments with offerings for wireless products and services will see an increase."
Victims of the new, harsher regime include printers, paper merchants, truckers and transportation companies and even the U.S. Postal Service.
"Instead of developing a direct mail communication that involves a letter and brochure and other traditional components of a direct mail package that would ride along an outside envelope, we're going to see greater utilization of self-mailers, or postcards ... non-envelope mail," Greene said.
This hurts the USPS. Flat mail, or self-mailers, typically costs 25 cents to 28 cents. First-Class mail, which is what packages go under, costs 34 cents for the first ounce and rises from there depending on the weight.
"I do think in these times there's going to be a greater dependency on e-mail," Greene said. "If the difficulties in mail are going to continue within large companies, then I think online mail will be made more a part of every campaign."
The DMA's Faulkner said that with no precedent for such a catastrophe, it was hard to address the long-term effect on direct mail.
"We don't really have any previous example of a threat to direct mail, so we can only go on another experience," he said. "Although the bombing of the towers is not a related experience for business, we did notice over three to four weeks, in response to the president's call, business return to normal."