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Earlier
this year, while still Parliamentary Under-Secretary of State for the
UK’s Department for Environment, Food and Rural
Affairs, David Milliband stated in an interview with the Evening Standard
that “war on junk mail” had been declared and that all direct
mail should in future become “opt-in”. When Milliband
was promoted to Secretary of State for Foreign Affairs recently in the
Gordon Brown Cabinet re-shuffle it was no surprise there was an audible
sigh of relief from the UK’s direct marketing community. However,
this hasn’t prevented the “opt-in” dialogue continuing
with his successor at the Dept. for the Environment, Joan Ruddock. |
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My
old friend Rosemary Smith in London described the UK situation rather
nicely: “Let’s not kid ourselves, universal opt-in is Armageddon
for this business and we need to stay awake to stop it happening”. |
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According
to Rosemary the most powerful lobby against direct mail in the UK right
now is from the “Greenies” and the
environmental issue seems to be at the core of the DM industry’s
dialogue with Government – rather than privacy. Every political
party in the UK is fashionably green these days and the environmentalists
don’t like the perceived paper wastage that direct mail represents
(despite figures showing only 2% of household waste consists of direct
mail materials and most direct mail in the UK is already being printed
on recycled paper anyway). |
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Meanwhile Rosemary tells me Ealing (where she lives) was completely inundated
by direct mail recently from every one of the UK political parties prior
to the first by-election which was held there after Gordon Brown took over
from Blair as prime minister. |
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Where
generating political support is concerned, Governments all over the
world use direct mail because they recognize its inherent usefulness
and value. In the UK I suspect that (when push comes to shove) the
business and commercial value of direct mail will ultimately be perceived
as being more important in the Government’s eyes than the significance
of perceived “paper wastage”. Meanwhile the DM industry
in the UK should continue to articulate the benefits of authentic, legitimate,
useful, recycled, opt-out direct mail (through a preference service if
necessary) – preferably by talking to the more informed, commercially
minded, less prejudiced types at the Department of Trade and Industry (now
called rather forbiddingly “Department for Business,
Enterprise and Regulatory Reform”) – rather than to the political “environmentalists” whose
positioning is really not that strong at all). |
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| Do Online Ordering Options Reduce Postal Response? |
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Several
mailers (including a well-known book publisher) have told me recently
they’ve found that using a website (and therefore an online
ordering option) to support postal direct mail campaigns reduces rather
than lifts response. This is interesting. Their rationalization
is that positive response is something immediate, powered by emotion or
excitement and creating a momentum, which leads easily to calling either
a telephone number or completing an order form sitting there right
in front of your nose. If there’s an online ordering option,
you must go find your computer (with the full intention of placing an order)
but often there can be a diversion on the way to any website – and
sometimes you just don’t get there! An A/B split or two will
tell you whether an online ordering option does – or does not – work
for your particular offer. (I do assume, of course, your online response
tracking is fully in place when calculating total response – which
takes into account response from each channel including mail, telephone
and online). I say this because I know that some mailers’ online(and
telephone) response tracking is somewhat less than 100% efficient. |
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Good News – and Bad News – from
the United States Postal Service |
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The
costs of mailing internationally out of the USA are now higher. IPA
rates are up 35% and ISAL rates are up by an average 14.1%. However,
one huge breakthrough for the USPS is that representatives are now explicitly
permitted to negotiate rates enabling the USPS to compete on price with
international postal operators. We’ve been offered an ISAL
rate from the U.S. to Japan recently by a USPS postal consolidator which
is significantly lower than the best rate we can get from any international
postal operator (even though we’re based in Asia – and therefore
a lot closer to Japan)! Delivery time for USPS’s ISAL service
to Japan is also only 4-5 days which is at least twice as fast as their
delivery time to most other destinations.
However,
a word of caution: I hear that the USPS in their eagerness
to become more profitable are seeking to cut ISAL costs by using “hubs” and
by negotiating “space available” contracts with airlines. In
many instances this will carry the risk of creating even longer ISAL
delivery times for some mailers to some destinations in the future. Not
good if you’re mailing “hotline” names – or if
you’re uncomfortable with the “uncertain delivery time” factor. |
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There’s no Turning Back. Print
Publishers
Must Try to Find Ways of Making Money from Digital
Editions |
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One
beneficiary of the decline in postal response rates to publication
subscription offers has been the “Asia-Pacific Publishing Convention” 2007
held earlier this month which was designed to help print publishers find
ways of making digital editions profitable. However, the perennial
challenge of acquiring and maintaining audited circulation is not a lot
easier online (especially paid circulation) – and circulation costs
will continue to eat into publisher’s profits. Useful ideas
on digital were exchanged at the APPC, and it’s clear many of the
larger publishers (who stayed away from this first conference – as
big players tend to do) will be attending the second event next year. They
have little alternative but to “stop treading water” (as the
convention organizers put it) and to actively begin to find ways of making
money out of the digital editions they will soon be forced to develop. |
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If Advertising in Digital Editions Becomes More Interactive,
Would Advertisers Spend More Money? |
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Whilst circulation
costs have become every periodical publisher’s
nightmare, advertising continues to be every publisher’s life’s
blood (print or digital). David Ennes, ASEAN general manager of
L’OREAL, who spoke at ACCP 2007, spelled out how L’OREAL
is actively capturing buyer details at point-of-purchase enabling the
company to track buyer purchases, value and frequency through a database
where relationships and sales are grown through tailored direct e-mail
offers. Their objective, Mr. Ennes said, is quite simply to encourage
repeat purchasing – and this is proving very productive.
However,
David Ennes did point out that leading women’s magazines were not
yet offering advertisers sufficiently interactive ways of reaching their
high-value readers which would enable advertisers (such as themselves)
to acquire new customers online and to further grow profitable direct
email activity.
It’s
clear that “exposure” alone derived from online advertising
is no longer good enough. Advertising in digital editions will
simply have to become interactive to the point where advertisers are
willing to invest money because the response they are actually receiving
online is trackable, quantifiable and measurable. |
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Compliance With New Stringent Postal Sort Conditions
Needed to
Secure Maximum Discounts When Direct Injecting
into the USPS |
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Many
fundraisers believe they have a “moral obligation” to
their donors not to spend more on new donor acquisition than is absolutely
necessary. To this end, U.S. fundraisers cut costs by printing
in China (often sourcing premiums there), and then ship by surface container
back to the U.S. West Coast and direct inject into the USPS.
To
get maximum postal discounts from the USPS you must now arrange for enhanced
Post Code accuracy through DPV (Delivery Point Validation) Certification. You’re
not allowed to access or use this software outside the USA, so you must
have your mail sorted using DPV software (effective August 1 this year)
offered by one of the postal sort companies on the West Coast (PSI, Pitney
Bowes, Anchor or Smartmail, for instance) who will then direct inject
on your behalf.
‘Dimensional’ packs
are being used successfully by many fundraisers these days, but there
are also now maximum size and thickness rules being applied by the USPS
(and a new “flexibility” test), so to avoid overpaying on
postage make sure your ‘dimensional’ package is approved
before you print in China and ship back to the U.S. for direct injection. These
are extra ground rules being applied by the USPS – but if the extra
cost is reasonable and they facilitate full delivery of our mail within
the U.S. – who are we to complain? |
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Make Way for the Good Guys
With Good Products |
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It
has always struck me that one of the greatest international mail-order
opportunities out there lies with manufacturers and distributors of
authentic natural health products which work. Such products are not always
prescribed by general practitioners (they weren’t taught about
them in medical school) and they tend not to be sold by health product
retailers so many of whom are controlled by the pharmaceutical industry
against whose drugs many natural health products are competing.
It’s
therefore very disturbing to see the negative publicity being given
in Europe and the USA recently to the scale of bogus and low quality
medical products being sold online.
This
discredits an important mail order channel which potentially enables
consumers to obtain authentic, proven and efficacious natural health
products which can help their condition but are not easily available
through pharmacy networks or the usual medical establishment channels. (I
feel strongly about this). |
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More Fresh Names… Will Lead
to Larger Volume Mailings…
Which Will Lead to More Fresh Names… Which
Will Lead to … |
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Last
month I was very honoured to receive the 2007 “Lifetime
Achievement Award” from the U.S. DMA’s International Council. I
thank them for that. I flew to New York for lunch to accept the
Award (upgrading to first-class from business class both ways using Asia
Miles because of my bad leg). It was good to meet up with many
old friends in the business at lunch and also the next day before returning
to Asia.
In
my brief acceptance speech I remarked on the difference between the
good old days when high response rates were “normal” and
today when low response rates are “normal”. The common
denominator between good response and poor response was, and still is,
the volume of fresh names available. Of course, fresh names in
the old days were still comparatively “fresh” while today’s “fresh” names
(within the major markets) have all been hammered and overwhelmed by
mail pollution (ie. the sheer volume of useless and deceptive offers – offline
and online).
However,
a freshly generated name still has value as a freshly generated name. We know this from those blessed markets where “hotline” names
are available which deliver much higher than average response rates. So
much higher in fact that in many markets (such as Japan) “hotline” names
can only be rented on a reciprocal basis against a similar number of
other “hotline” names. Existing mailers don’t
like to make it too easy for newcomers into the market…
One
of the points I made in my Award acceptance speech in New York concerned
this issue of fresh names. MLA is currently putting together (with
the help of a data compiler) raw data from the public domain in 125 countries
(which have been neglected for several years) where there’s no
local list industry and low to miniscule volumes of local and international
direct mail. This will form the basis of a co-op mailing shared
by reputable mailers with authentic offers which would gradually convert
compiled and gathered names into ‘fresh” names and allow
participants to reciprocate their separately generated fresh names with
each other.
Many
international mailers will argue that only the top half-a-dozen industrialized
countries matter. I disagree. Multinationally
there is one language (English) – and one currency (US Dollar) – which,
to a greater or less degree, are universally recognized. This combination
anyway is good enough to generate response which (on average) tends to
be 250% higher than response you get from industrialized countries – probably
because people in these smaller countries experience less mail “pollution” and
are exposed to much less mail.
Smaller
markets are like currents in a cake. No single country is significant
in itself (though response rates can vary consistently by a significant
percentage) – but response from many smaller markets together in
a single DM campaign can make for a much sweeter overall experience when
viewing the bottom line.
Rather
than continuing to experience a downward spiral in the multinational
market where smaller mailings chase fewer fresh names which lead to smaller
mailings chasing even fewer fresh names – the reverse would apply. More
fresh names can lead to larger volume mailings… generating more
fresh names… leading to yet larger mailings… leading to
yet more fresh names … leading to even larger mailings… leading
to even more fresh names… leading to… |
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Bulk Mail Penalties Are One More Risk
When Mailing into Larger Markets |
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Another reason for
mailing smaller countries is you can do so by mixing and spreading
your mail across many smaller countries without incurring bulk mail
penalties. Quantities of more than
1,500 pieces a day, or 5,000 pieces over a period of 2 weeks, identifiable
from the same sender, which are mailed into certain countries such
as Japan, Germany, UK, Greece and France for instance, can incur high
bulk mail penalties.
Obviously larger mailers
have ways of getting around this UPU restriction (it’s not for me to describe exactly how right here and right now) – but
it’s a bit messy and entails more than a little bit of planning
and one more element of risk – as if there wasn’t enough
risk already out there every time we mail. |
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James Thornton
Managing Director |
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