The U.S. Postal Service has awarded four new advertising agency contracts that are scheduled to go into effect this month.
The contracts, announced late last month, were awarded to:
• Foote, Cone & Belding, New York, for direct marketing.
• Leo Burnett, Chicago, for lead creative.
• Frankel, Chicago, for in-store retail.
• Grey/Media.com, New York, for media planning and buying.
Earlier in September, the agency also announced three multicultural agency selections at the National Postal Forum in Anaheim, CA:
• African-American: Chisholm-Mingo, New York.
• Hispanic-American: Bravo Group, New York.
• Asian-American: Asianese Partnership, New York.
All of the contracts run for one year, and the postal service has the right to extend each contract without rebidding four times after these contracts expire, said Allen Kane, chief marketing officer and senior vice president.
This year, the agency used a media-focused strategy, as opposed to a product-oriented focus, when choosing advertising agencies. The USPS first used this strategy last year in an effort to make sure each advertising agency handled one type of advertising. In the past, the USPS had several agencies doing similar work for different product groups at the same time, but that was not productive.
“Last year, we hired some outside consultants to help us figure out the best way to set up advertising so that we can promote and do our advertising and at the same time increase revenue,” Kane said. “And they convinced us that instead of having generalists that do everything and charge you for everything, we'd be better off focusing on specific parts and get best in class.”
Kane said this strategy was successful last year, so this year “we also narrowed each agency's assignment to capitalize on specific specialties.”
The USPS gave each advertiser a performance-based contract tied to ad effectiveness. For example, the agencies have incentives to reach results based on goals and to work together on ad campaigns that build the USPS' business.
Last year, USPS named Foote, Cone & Belding, New York, for its mass-consumer creative advertising; DraftWorldwide, Chicago, for direct marketing; Frankel & Co., Chicago, for in-store materials; and Young & Rubicam, New York, for media buying, planning and ethnic advertising.
Kane said, “The contracts were ending, and we had to re-solicit them. So, we basically threw it out to the marketplace and said, 'Come on in and tell us what you would do,' and then we assigned the teams to evaluate them, and whatever it was, it was.”
While the USPS has done multicultural advertising for many years, this is the first year the USPS has selected specific multicultural agencies.
“In the past, we've had multicultural agencies subcontracted under other agencies,” Kane said. “But this year, what we've done is put them in direct relationship to our people. Instead of them being subs, they come to the head of the table, and they are agencies we work with directly with no middleman.”
Kane said it was critical for the agency to focus on multicultural markets this year because “one out of every four Americans in the year 2020 will be of Hispanic origin, so if you look at those customer segments, there are huge opportunities to help our customers build business in the multicultural areas.”
While he would not be specific, Kane said there would be several campaigns “out there this fall, centering around our merchandising, our core products, and our e-commerce products and services, and our access points for retail — beyond the 38,000 retail post offices.”