“Do-Not-Mail Registers” Could Still Be Introduced. DMA’s Have a Responsibility to Preempt this Possibility.
There is just a frisson of nervousness percolating through the direct mail industry in the U.S. concerning the number of “Do-not-Mail” bills which have been introduced for state legislations this year. The latest count is 11 States including Colorado, Connecticut, Hawaii, New York, Maryland, Michigan, Missouri, Montana, Texas and Washington. These bills would include a Do-not-Mail register with heavy fines for every violation. Non-profits, politicians and business-to-business mail would be exempt.
There is some doubt as to whether mail (which can be opened at leisure) is perceived as being as intrusive as an interruptive commercial call from a stranger at dinner time.
However, it should be recalled that many thought the “Do-not-Call” register would never take off but (as my good friend and colleague Jon Lambert pointed out recently) more American households signed up for the U.S. “Do-Not-Call” Register in the first 10 days it was available than have ever voted in a presidential election!
So those of us in the direct mail industry everywhere should not be sanguine about this threat. What is potentially dangerous is the way lawmakers talk loosely about signing on to a “no junk mail list” as if all direct mail is “junk mail” which is patently not correct. Direct Marketing Associations everywhere should begin to anticipate aggression in this respect from a vocal few by focusing on and drawing media attention to authentic and entirely acceptable materials which use the direct mail channel. At the same time DMA’s should continue to collaborate in identifying and stopping deceptive and fraudulent mailings (ie. real “junk mail” )which certainly has the effect of damaging the DM industry’s reputation with consumers.
In this respect it’s a pity the U.S. DMA (in its infinite wisdom) does not make its existing “Do-Not-Mail” file more easily available to members (let alone non members). They charge a very high fee for access, discouraging many mailers from actually using it.
It’s also difficult in the U.S. for individuals to have their names added to the ‘Do Not Mail’ file held by the DMA. For the untrained (especially those with little experience of database structure) it is, in fact, very, very difficult to sign up. Why should this have to be so?
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Resurgence of Win-Win Partnership Deals Between Direct Marketers and Service Providers?
Over the years, after selling my periodical publishing interests and starting MLA in 1983, I have had many “partnership” deals with direct marketing companies where I’ve been willing to share the costs, risks and rewards of new customer acquisition. Without exception these have been profitable for both parties.
Not many international DM service providers are willing to take this risk due to their lack of previous experience as direct marketing principals. Talking at some length again to my colleague Jon Lambert there does seem to be currently a resurgence of interest in direct marketer/service provider partnership deals – where both parties win. The service provider earns more by investing some of their own capital and know-how in DM programs (assuming they are successful) than they would simply earning commission on list rentals or on print and production services, and the direct marketer acquires a much larger number of new customers than they would by just mailing the “low-hanging fruit”.
Obviously any such DM program must be based on a high value of renewability at the back-end – otherwise there’s nothing in it for anyone.
For instance, if a new customer costs US$100 and the average value of a customer is only 3 times this, the direct marketer would have no choice but procure services on a straight “fee for service” basis. But if the average customer value is at least ten times the acquisition cost (or a lot more) there would be margin and opportunities for some kind of “performance deal” between direct marketer and service provider
I have done successful deals in the past with high ticket travel club membership and high-ticket financial newsletter marketers. Currently insurance industry and credit card marketers are interested in such risk/reward programs and these are likely to grow in the future.
However, there are two very important rules which must apply. Accounting (by both sides) must be scrupulous. There must also be open discussion between the two parties on a regular basis since anomalies may arise where either one side or the other benefits unfairly. Without such dialogue, these types of partnership agreement do not work in the long term.
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How to Mail into China from Offshore, Process Credit Card Charges Locally in Local Currency – and Still Get Paid Offshore
Incorporating a DM business inside China is not only expensive – but fraught with potential danger (as many international direct marketing companies have found to their cost). One way round this is to remain offshore but use locally based service providers. One of the most important and challenging requirements is to be able to offer a local debit and credit card charging facility in which payment is made locally in local currency. This facilitates orders enormously otherwise you have to rely on response from only those Chinese and foreigners resident in China who hold international credit cards. Some major international direct marketing companies incorporated in China are willing to provide a local payment processing service on behalf of offshore direct marketers – amongst them Bertelsmann – who have been operating in China for many years.
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Can Periodical Publishers and Newspapers Make Money from Online, Digital Editions?
There have been very few events targeted to periodical and newspaper publishers in Asia during the last few years, but suddenly there are two slated in 2007. The first, “Publish Asia 2007”, organized by IFRA Asia – was aimed at regional newspaper publishers and took place on March 26-28, 2007 in Manila. It was not successful. One-third of the expected delegate numbers turned up – so exhibitors were unhappy, speakers were unhappy and the organizers were unhappy. The next event on August 2 and 3 in Kuala Lumpur will be the “Asia-Pacific Publishing Convention” organized and chaired by two friends of mine – Ashok Nath (who launched World Executive’s Digest 25 years ago) and Cyril Pereira ex-South China Morning Post who until this year had been chairman of SOPA (Society of Publishers in Asia) for a number of years.
The focus of the event will be on how periodical and newspaper publishers can survive and be profitable in the future bearing in mind circulations are down, advertising share for the print channel is down and (for newspapers) classified advertising is down. The big issue, of course, is can publishers make enough money in future from digital editions? Is the web a threat (as most traditional print publishers seem to believe) or is there a real opportunity to spin off up-to-the moment news content or very targeted, high value, “unique” content which is compelling enough to attract regular readership and revenue through new forms of interactive advertising? What is clear is that if readers won’t give news or specialized content websites the attention, advertisers won’t give them the money!
I’m reminded of the days when off-the-page direct response advertising (and loose inserts) worked better than today. We found (with hardly an exception) that advertiser response levels were entirely dependent on a lively, compelling editorial environment and real reader traffic. In case after case, scores of likely publications were tested, and at best only two or three (usually major dailies or weeklies with compelling content) would deliver acceptable response on a consistent basis. Content was king then – and this is more likely to be the case in the future – especially for publishers who invest in online digital editions.
Publishers interested is contributing to or listening to the “digital’ discussion at the A-P Publishing Convention in August should contact Tintin Romero, Event Manager on tintinromero@oiceventsasia.com.
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Reducing Direct Mail Costs Can Help to Reduce Customer Acquisition Costs
Our hearts go out to European based mailers who pay for their DM Production, postage and list costs in Euros (or pounds sterling). Last week the Euro stood at $1.36 to the US Dollar and Sterling exceeded $2.00 to the USD Dollar for the first time in 26 years. Asian currencies such as the Chinese Renmimbi, the Hong Kong dollar and the Philippine Peso stay linked to the U.S. dollar and as the US$ declines against Euro and Sterling so the costs of outsourcing DM campaigns from Asia becomes lower compared with the costs of producing in Europe. This cost advantage becomes even greater when you take into account the much lower salaries (by a factor of upto 10 times) paid to Asian print operators compared to European and U.S. print operators.
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The List Business is Changing
The other day I was told of a major data compiler who currently employs 30,000 people in India constantly gathering new data and updating existing data for international markets. At this time there’s growing interest from larger mailers in accessing universes of names in particular countries rather than relying on more expensive regional or local responder files to reach target numbers. At the same time there’s a growing insistence out there on reciprocal deals. “I will only rent my recent responder names to you if you’re willing and able to reciprocate and offer me an equal number of recent names from your own file”. Such reciprocal deals don’t only apply these days in the Japanese market but across smaller, multinational markets as well which is making it harder for newer, start-up mailers to get off the ground.
Another significant advantage to already owning a good, large database is the willingness of large, high-ticket mailers to pay commission on results rather than a list rental fee. This takes some of the risk out of mailing for them and such deals are also of interest to database owners if they believe in the responsiveness of their file and the chance of earning more in commission than they would from a straight rental arrangement.
Intermediaries (i.e. list brokers) will continue to have a role in all this because of the need for an independent “policeman” to ensure such deals between mailers and database owners are completely fair and transparent for both parties.
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India Post Must Change Some Anachronistic Rules First if they Want to See a Significant Increase in Their Direct Mail Volume
I spoke to a number of large direct mail users in India recently who nearly all prefer to mail domestically at the second-class rate in unsealed envelopes (called “Bookpost”) since this service is cheaper than first-class for a 20gm-30gm package by an average factor of 40%
However there’s a restriction. India Post (for historical reasons) insist that any direct mail letter which carries a salutation or a signature must be mailed first-class in a sealed envelope (at an average premium of 40%).
I called Mr. Sutar recently (the Assistant Postmaster General) to point out that even though direct mail may be “personalized” there’s nothing individual or “private” about it and it does help to raise response rates which would lead to higher DM volumes for India Post in the future – especially if they permitted direct mailers to use their “Bookpost” lower rate service which every other postal administration in the world is now willing to do (using their own 2nd class services equivalent to “Bookpost”).
Mr. Sutar cut me short and asked me to send him my points and questions in writing. He then charitably passed me over to a colleague who listened politely for 60 seconds and then told me to look at India Post’s rules listed on their website. He terminated the conversation forthwith but did invite me “to come and talk to us sometime”.
This is what the direct mail industry in India is up against. A huge, intractable bureaucracy entrenched in the ways it has been doing things for years, even if those practices are clearly outdated and ultimately against India Post’s long term interests.
Footnote: The Indian Government has just announced a charming new Bill which will allow courier companies to deliver letter items below 150gm in India only if they charge customers 2 ½ times more than India Post charges for its SpeedPost service. (This is an improvement on the government’s original plan to completely ban courier companies from delivering letter items below 500 gms at all!).
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A Nine Billion Message Spammer is Nailed (at Least Temporarily)
It was interesting to see a copy of Hunton & Williams “European Privacy & E-Commerce Alert” March, 2007 issue. One of the items in this issue reported the fine of Euros 75,000 imposed in February on a Dutch spammer for sending an estimated 9 billion unsolicited spam messages promoting sex-related items and materials! He had used many proxies ie. computers of unsuspecting end-users – for sending the spam and after all this effort had earned the princely sum of something over US$52,000.
What a nasty piece of work this person must be.
James Thornton
Managing Director
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