Advertising Mail is the major growth segment of the postal mail stream. Most advertising mail is in the Standard A category, but a significant portion of ad mail also is sent First-Class. In this article I'm going to concentrate the discussion on the Standard-A portion. Prior to postal reclassification most of you knew it as Third-Class mail.
With the emergence of the Internet as a viable advertising medium, the choices for advertisers continue to expand. TV, radio, newspapers, magazines, telemarketing and now the Internet are all realistic alternatives to direct mail. Therefore the postal service needs to ask itself: What do advertising mailers want from the postal service?
In my opinion, mailers want consistent and reliable service at reasonable speed, with postage rates increasing at less than the rate of inflation.
Beginning with the Marvin Runyon era as postmaster general and continuing now into the early part of the reign of Bill Henderson, the postal service has kept the postage rate increases for advertising mail under the rate of inflation. However, when it comes to delivery service, we just don't know what is happening.
Let's start at the beginning of the delivery service issue, that is, with service standards.
It's hard to believe, but there are no published delivery service standards for Standard-A Mail. While the postal service is spending a lot of money to advertise this product successfully, it seems reluctant to establish standards for its delivery service. The postal service began to address this need when it wrote its Fiscal Year 1999 Annual Performance Plan. In that plan, as part of the performance goal section, the USPS wrote that it will “during the fall of 1998, set a FY 1999 target for advertising mail on-time performance.”
Several comments with regard to this target are appropriate. First, it's now the Spring of 1999 and the USPS has yet to establish its target for advertising mail on-time performance.
Second, and probably more importantly, before one can set a target for on-time performance, one must set a target for delivery performance. For example, in First-Class the postal service has specified delivery times in one, two or three days, depending upon the location.
The postal service has yet to establish these delivery performance targets for advertising mail. Furthermore, with a minor exception, no USPS measurement or reporting system exists for advertising mail. A few years ago the postal service, in conjunction with the mailing community, established EX3C. This system measured delivery service for individual pieces of advertising mail, which were salted into regular bulk mailings. For its own reasons, and against industry wishes, the postal service canceled EX3C, promising to replace it with a better system. We're still waiting for that replacement.
In the meantime, the mailing community led by Joe Lubenow, vice president of postal affairs of Experian, has developed the concept of Planet Code. This code, which is a variant of the postnet code currently in use, could be used to track mail delivery.
However, there are serious questions about the use of a code which might require a huge network of data collection, data transmission and data storage for all devices that process mail. It's possible that the prior sentence exaggerates the effort involved, but unfortunately, the USPS has yet to provide an estimate of expense involved to use the Planet Code to measure mail delivery.
Sometimes we get a bit jaded by the track and trace ability of Federal Express to know the location of all packages and overnight letters in their system. Some think the USPS needs the same capability. Before we press the postal service to provide that same capability, a reality check is in order.
Federal Express handles approximately 3 million parcels and letters a day, with an average revenue per piece of $15.70. The USPS handles approximately 500 million pieces a day, with an average revenue per piece of 30 cents. While we can understand the economies of scale that the postal service's volume provides, do we really expect the USPS to have and provide the same monitoring capability as Fed Ex for each piece of mail?
The message here is clear: It's time to get back to basics for advertising mail. The postal service needs to provide consistent, reliable service with a reasonable level of speed. And most importantly, it needs to develop, with advertising mailers, delivery service standards. Then it needs to measure and report on how it is achieving those standards. Just as the postmaster general regularly reports to the board of governors on First-Class delivery performance, he should report on Standard-A delivery performance.
Given that Advertising Mail is the engine that is driving mail growth, this is the least that should be done.
Cary H. Baer, New York, is a direct marketing consultant and chairman of the Advertising Mail Marketing Association.
