It’s Time to Stay the Courier

From the New York Times Business Section
By JOE NOCERA
Published: August 7, 2009
Consider the plight of John E. Potter, the chief executive of the second-largest employer in America. On the one hand, he has a guaranteed monopoly for much of his business. On the other hand, monopoly or not, the combination of the Internet and the recession is absolutely crushing his company, just as it is for so many other companies across the country. His last quarter’s results, which were announced on Wednesday, revealed a loss of $2.4 billion. The business is on track to lose a staggering $7 billion in 2009, on around $68 billion in revenue. That’s practically General Motors territory.

What can he do to fix the situation? Surprisingly little. His employees have clauses in their union contracts that forbid layoffs. Nor can he renegotiate their gold-plated benefits, the way, say, the auto companies did when their backs were against the wall. Political pressure makes it nearly impossible to shut down any of his company’s 34,000 facilities, no matter how outmoded or little used. He can borrow money, but under the law, he can add only $3 billion in debt a year — an amount that isn’t going to come close to covering his losses.

Oh, and get this. Every year between now and 2016, he has to put aside over $5 billion to finance health benefits for future employees. You read that right: future employees. There isn’t another business in the country that finances benefits for employees it hasn’t even hired yet.

Welcome to John Potter’s world. He’s the nation’s postmaster general. Yes, that’s right: for the last nine years, he has run the United States Postal Service, which, since 1970, when it stopped being a government department and started becoming self-sufficient, has been the oddest of ducks. It is expected to operate as a business, turning a profit and so on, and yet it is still subject to Congressional oversight and all sorts of legal constraints, like that ridiculous health benefit prefinancing for future employees, which was part of a big 2006 postal reorganization bill. (Its main purpose, it would seem, is government accounting: those funds get counted against the federal deficit.)

Even so, until recently, Mr. Potter had had a pretty successful run. A smart, likable, lifelong Postal Service executive, he got it through the anthrax crisis early in his tenure. He saw it through 9/11 (in no small part by engaging Federal Express to fly long-distance mail during the day, when its planes were empty, something it still does). He has overseen productivity gains and, according to a poll conducted by Rasmussen Reports, a rise in customer satisfaction. Between 2001 and 2006, he even eliminated the Postal Service’s $11.3 billion debt. That year, 2006, was also when demand for mail service peaked, with 210 billion pieces delivered.

But the last few years have been brutal. The Postal Service lost more than $5 billion in 2007, and another $2.4 billion in 2008. And, of course, it is on track to lose that whopping $7 billion in the current fiscal year. (Its fiscal year ends in September.) The amount of mail being sent is dropping like a stone — it will be down to 175 billion pieces in 2009. Mr. Potter has reduced the Postal Service’s head count to 650,000, from 800,000, almost entirely through attrition. He has cut costs every way he can think of. And still the losses mount.

A few weeks ago, the Government Accountability Office added the Postal Service to its list of “high risk” federal agencies, meaning that it is in such dire straits that it needs “to restructure to address its current and long-term financial viability.” Indeed, if something doesn’t change by the fall, the Postal Service will have to renege on those health benefit prepayments — despite its legal obligation to pay them — or start missing payroll. “U.S.P.S. must align its costs with revenues, generate sufficient earnings to finance capital investments, and manage its debt,” the G.A.O. said. Just like any real business would.

“If you are asking me to run it like a business, give me the same tools that someone would have in the private sector,” Mr. Potter said when I spoke to him recently.

But as I discovered on Thursday, when I watched a Senate hearing on the current Postal Service crisis, that’s not likely to happen. For one thing, Mr. Potter isn’t really asking for the tools he needs to turn the Postal Service into a real business. He is asking Congress to relieve it from the health prepayments, which he is likely to get, at least temporarily. He is also asking that the Postal Service be allowed to reduce mail service to five days a week, and to eliminate some postal branches. These aren’t exactly revolutionary ideas — yet they are viewed as highly controversial in Congress, which frets that constituents might get angry if the local postal branch closes.

But even if Mr. Potter were to get his way on these two items, they would still be only stop-gap measures that fail to tackle the bigger question. As the Internet continues to erode the use of snail mail, does the Postal Service’s business model still make sense? Do we even still need the government to deliver the mail anymore?

To me, the answer is obvious: no.

Think for a minute about the mail that comes into your home. In the modern age, very little of it is personal mail. The vast majority is commercial mail of some sort — advertisements, bills, movies from Netflix or catalogs. Once upon a time, said Rick Geddes, an associate professor in the department of policy analysis and management at Cornell University, the postal service was viewed as “a way to bind together the nation. In subsidizing mail service to rural communities you were keeping them connected to the rest of the country.” But today, he added, “it is kind of silly to say we are binding together the nation through advertisements and catalogs.”

These days, the main justification for keeping the postal service as a quasi-government entity is the belief that no private company would be willing to deliver the mail to sparsely populated rural areas of the country. People fear that it would be a little like airline deregulation: communities that weren’t large enough to justify flights in the newly deregulated environment lost their carriers.

But that mission of universal service has all but blinded just about everyone connected with the Postal Service. Congressmen — many of whom, after all, come from rural areas — are loath to give the Postal Service too much free rein for fear that Mr. Potter’s minions will start shutting down post offices. (Never mind that 2,000 of them serve fewer than 100 people each.) The postal unions, with their no-layoff clauses, have used universal service to justify benefits so generous the Postal Service would save $600 million just by bringing them in line with other federal employees.

As for Mr. Potter himself, while he may want more freedom to run the Postal Service like a real business, he, too, seemed surprisingly wedded to outmoded ideas about mail service in America. “This country needs to have and to protect universal service,” he said. “Our business is all about making sure every American can stay connected with every other American.”

I failed to ask him the obvious follow-up question: Don’t e-mail messages now do that?

For most of us, of course, it does — and that will increasingly to be the case, as broadband makes it way into, yes, even those rural areas that everyone is so worried about. Michael A. Crew, a professor of regulatory economics at Rutgers told me that that while the Postal Service’s “short-term situation is bleak, its long-term situation is really bleak.” He is one of a number of experts who say they believe that even when the recession ends, the Postal Service’s woes won’t be over. As businesses look to save money in the recession, for instance, they are starting to do end-arounds the Postal Service. Online bill-paying is become ever more popular. Evite is starting to replace mailed invitations to parties. None of that business is ever coming back.

Which is why, instead of trying to find short-term, piecemeal solutions to the current crisis, those involved in managing and overseeing the Postal Service ought to be thinking harder thoughts about blowing up its business model. Maybe the Postal Service should turn itself into a giant outsourcer, handling some tasks but handing out others, for a fee, to more efficient companies. Maybe the government should allow companies to bid on lucrative urban delivery — with the proviso that they also deliver to rural areas. Maybe some areas should get mail deliveries less frequently than others. Maybe there should be radically different pricing structures. Maybe it should even lose its monopoly on first-class mail. I mean, why not?

Mr. Geddes, the Cornell professor, says he believes that the only solution is for the Postal Service to become “just another company” — lose its monopoly, shed its bureaucratic mind-set, become able to negotiate freely with its unions, and answer to shareholders instead of Congress, which is always going to resist significant change that might upset a constituent. Only when that happens will it be able to bring its costs in line with its revenue.

“The post office is not broken,” Mr. Potter insisted. But surely it is. And its current crisis brings to mind Rahm Emanuel’s line that you never want a serious crisis to go to waste.

Alas, here in the middle of its worst financial crisis ever, the Postal Service and Congress seem utterly intent on wasting it.

Tags: Direct Mail, Direct Marketing, direct marketing association, Jack Potter, Jack Potter congressional testimony, junk mail, Letters, Mailing, mailing services, Money, Philadelphia Post Office, Postage

Summer Postage Sale – well, sort of a sale, no, more like a small rebate

To those that are excited about the impending summer postage sale, there are a few details you need to know, first, did you receive a letter from the USPS recently?
Here is what it looks like: summer-sale-electronic-letter

Here are the details:
The USPS has made it official (almost) that they are going forward with the proposed ‘Summer Sale’ event. The PRC must still weigh in with their decision, which is expected in late May, to make this program official. This program would provide a 30% postage credit on mailings submitted between July 1, 2009 and September 30, 2009. This incentive program is designed to increase mailing activity during the usually dormant summer months, when the USPS has their most excess capacity available.

Unlike most sales however, there are a multitude of qualifiers that apply to the Summer Sale.

Who and what qualifies?
For the most part, the USPS has already determined what mailers qualify. Letters were sent out on 5/7/09 to approximately 3,200 mailers whom they determined will be eligible for this program by utilizing the mail volume data that exists within their internal system.

1. This program only applies to Presorted Standard letters and flats.
2. The next qualifier is that you must have mailed a minimum of 1,000,000 pieces during the time period of October 1, 2007 and March 31, 2008. Total volume is calculated by mailer, so even if you utilize multiple permits, your total volume will be calculated across all permits that are associated to your organization. This also applies to “Ghost Numbers”, which are created if your mail is sent through a Mail Service Provider. If you feel you are eligible, but have not received a letter, then you can request a contact by emailing your information to summersale@usps.gov.

If you have met the criteria above, you are ready to begin to calculate the ‘Sale’ portion of the program. The 30% postage credit will be given only on the number of mail pieces that exceed your mailing threshold for the time period of July 1, 2009 to September 30, 2009. The caveat to this all is that your mail volume in October must not fall below your mailing threshold for that month. If this occurs; the total credit accrued from mailings between 7/1/09 to 9/30/09 will be deducted by the amount of pieces that fell below the threshold in October and that will be the final credit. The credit will be issued at some point in December of 2009 once the USPS has completed the above calculations.

How to calculate your potential savings:
Below is an example of how to calculate the savings that you as a mailer may receive through this program. Listed in this example is the all important Threshold, which will be the key to planning your mailings to take advantage of this program.

1. Base volume (7/1/08 – 9/30/08): 500,000 pieces

2. Trend:

a. Volume 10/1/08 – 3/31/09 = 1,800,000 pieces

b. Volume 10/1/07 – 3/31/08 = 2,000,000 pieces

c. a/b = (1,800,000 / 2,000,000) = .90 or 90%

3. Base x trend = Threshold:
500,000 x .90 = 450,000

4. Rebate = (Actual volume – threshold) x (actual postage cost / actual volume) x 30%

a. Actual volume for 7/1/09 – 9/30/09 – threshold =
475,000 – 450,000 = 25,000 pieces

b. Actual postage cost / actual volume =
$103,075 / 475,000 = $0.217

c. Rebate =
25,000 x $0.217 x .3 = $1627.50

The October Effect:
It is important to keep your mailing volume for October in mind when factoring the potential savings. If your volume falls below the calculated threshold, then your overall credit will be impacted. Below is an example of how to calculate this effect.

a. October 2008 volume x trend (in #2 above) = October threshold:
300,000 x .90 = 270,000 pieces

b. If October 2009 (260,000 pieces) < October threshold:
Threshold – actual = adjustment
270,000 – 260,000 = 10,000

Rebate adjustment

a. Actual volume – summer sale threshold – rebate adjustment:
475,000 – 450,000 – 10,000 = 15,000

b. New rebate:
15,000 x $.217 x .3 = $976.50

For those of you that have received a letter; be sure to certify the volume that the USPS has provided to you since this will be a binding once you have agreed to enroll in the program. Also be sure to have your response in by August 1st, 2009.
This program is a great way to potentially reach more customers at a lower cost and therefore enhance your business’ ROI. The system is not perfect, but it is a step in the right direction for the USPS to utilize their new found pricing freedom to help mailers.

From the Federal Register today:
Federal Register Notices

DATE: Pending publication in the Federal Register.

Standard Mail Volume Incentive Program (aka Summer Sale)

AGENCY: Postal Serviceâ„¢.

ACTION: Final rule.

SUMMARY:
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®), to add section 709.2 which introduces new standards for a special volume incentive program for mailers of Standard Mail® letters and flats with mail volume exceeding their individual USPS™-determined threshold levels. The program period will be from July 1, 2009 through September 30, 2009.

EFFECTIVE DATE: July 1, 2009.

FOR FURTHER INFORMATION CONTACT: Kevin Gunther at 202-268-7208.

SUPPLEMENTARY INFORMATION:
The Postal Service is implementing a volume incentive program for qualified high-volume mailers of commercial or Nonprofit Standard Mail letters and flats, for volume mailed between July 1, 2009 and September 30, 2009, above their USPS-determined threshold level. This program encourages mailers to provide new volume and to take advantage of our current excess capacity to process and deliver additional volume.

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10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology

By Chris Sweeney
Published on: May 4, 2009 in Popular Mechanics
The USPS has a deep sense of history—since the first Postmaster General was put in place in 1775, the USPS has changed its structure and delivery methods numerous times thanks to war, economic turmoil and emerging new technologies. Here, we look at 10 of the geekiest ways the postal service has delivered the mail.

Mule Mail
19th century-present
(Photography courtesy of the Smithsonian National Postal Museum)

Animals have always played a major role in delivery services—from the Pony Express to horse-drawn carriages—but only one beast is still hauling mail today. A handful of donkeys and deliverymen still embark on a six- to eight-hour journey through the Grand Canyon five days a week to deliver mail and other supplies to residents of Supai, Arizona. This is the last route being serviced by mules.

Pneumatic Mail Tubes
1893-1953

New York, Boston, St. Louis, Chicago and Philadelphia all relied on an underground system of pneumatic tubes to move mail during the early 20th century. The two-foot long canisters held 600 letters as they moved through the tubes at speeds up to 35 mph. There were about 27 miles of pneumatic tubes running through New York City, including routes stretched across the Brooklyn Bridge, linking Manhattan with Brooklyn. The proliferation of delivery trucks and expanding urban centers contributed to the demise of this system. Private contractors leased the pneumatic tubes to the USPS, and by 1934 rates were as high as $19,000 per mile per year. Today, many of the tubes remain intact under city streets.

The Snowbird
1921

Though this vehicle was never officially part of the USPS fleet, a handful of carriers relied on the Model-T Snowbird attachment kit to plod along snowy routes, providing an alternative to horse-and-sleigh. Snowmobiles are still used in places like Minnesota, Wisconsin and Alaska for winter deliveries.

Highway Post Office Bus
1941-1974

This post office on wheels was inspired by railroad service and designed to reduce lag time by allowing postal workers to sort parcels while in transit. The first batch of buses, built by the White Motor Company, came equipped with distributing tables, letter cases and enough space to hold 150 mail sacks. Advances in automated sorting and a major restructuring of the postal system eliminated the need for on-the-go organization. In the early 1970s the decision was made that mail would be sent to a central location where high-speed sorters would route it.

Victory Mail
1942-1945

In order to keep correspondences flowing between soldiers and the home front without sacrificing precious cargo space, the postal service introduced stationery that was shrunken into microfilm before being shipped. Upon arrival, the letters were enlarged to a fraction of their original size, sorted and delivered. A single sack of V-Mail was the equivalent of 37 sacks of regular mail, although letters were limited to 700 words.
10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
The U.S. Postal Service (USPS) is facing a potential $6 billion deficit in 2009. Earlier this year it asked Congress to consider cutting a day of delivery from its six-day schedule. On May 11 the price of stamps will jump another 2 cents, and in Idaho, the last continental route serviced by bush plane is about to be cut. The USPS has a deep sense of history—since the first Postmaster General was put in place in 1775, the USPS has changed its structure and delivery methods numerous times thanks to war, economic turmoil and emerging new technologies. Here, we look at 10 of the geekiest ways the postal service has delivered the mail.

The Mailster
1957-1967

The Mailster was a three-wheeled vehicle that weighed 500 pounds, boasted 7.5 hp and allowed each delivery person to haul an unprecedented 500 pounds of mail. Its compact size and maneuverability were ideal for getting around recently developed suburban areas. By the end of the 1950s, one-third of the USPS fleet was comprised of this vehicle. While higher-ups in the postal service were more than enthusiastic about the Mailster’s potential, the people actually driving it hated it, according to Nancy Pope of the Smithsonian National Postal Museum. Complaints from letter carriers assigned to Mailsters ranged from the front wheel getting stuck in trolley tracks to constant breakdowns, Pope says, and even one report of a massive dog toppling the vehicle. After many complaints and malfunctions, the postal service opted for the more reliable and sturdy Jeep to serve as the centerpiece of its fleet.

Missile Mail
1959

In the years following the second World War, the volume of mail increased by more than 30 percent. Postmaster General Arthur Summerfield called for a new means of delivery to satisfy the growing demand—from this, Missile Mail was born. On June 8, 1959, the Navy submarine USS Barbero launched a Regulus cruise missile filled with 300 commemorative letters off the coast of Florida. The missile made a flawless descent after soaring for 22 minutes, but the letters still would have needed to be removed, transported, sorted and routed had it been an actual delivery. Following a successful demonstration, Summerfield declared, “before man reaches the moon, mail will be delivered within hours from New York to California, to Britain, to India or Australia by guided missiles. We stand on the threshold of rocket mail.” Despite the success of the initial experiment, the USPS never revisited the idea of missile mail.

Segway
2002
(Photograph by Justin Sullivan/Getty Images)

Soon after it was unveiled in 2001, the Segway was introduced as an experimental vehicle into the U.S. postal fleet. By attaching courier bags, the Segway promised to reduce physical strains associated with lugging sacks of mail while increasing the rate of delivery. But experiments in Virginia quickly proved that it wasn’t efficient for deliveries. While a sidewalk in disrepair or curb can be tricky enough on a Segway, a flight of steps is impossible. Also, in areas where a letter carrier would just walk across front lawns, they were now forced to go up and down every driveway. The postal service eventually abandoned experiments with the Segway.

USPS and EVs
2006

The USPS has had their eyes on electric vehicles for a few years, with a number of plans still in motion. In 2006 the USPS tested a 2-ton van developed by the Azure Company, but the test was short-lived and inconclusive, according to a postal service spokesperson. In April, Chrysler announced its intent to apply for a federal grant that would allow it to build a fleet of electric postal minivans. Ruth Goldway of the United States Postal Regulatory Commission has also been pushing for stimulus money to go toward transforming the postal fleet to electric. By converting 142,000 delivery trucks, Goldway wrote in a New York Times editorial, the USPS would save 68 million gallons of gasoline.

Hydrogen Fuel Cell

Within the next 10 years more than 140,000 postal vehicles will be retired, leaving vacancies that need to be filled. The USPS is currently testing a third-generation GM hydrogen fuel cell vehicle that’s based on the Chevy Equinox. While hydrogen vehicles have much potential, says Darlene S. Casey, a USPS spokesperson, they have a long way to go, particularly when it comes to the necessary infrastructure.

1. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
I feel slightly deceived by the title 10 Geeky Ways to Deliver mail. I thought we were talking the way the modern Post Office delivers mail. PM needs to do a story about OCRs,DPS, DBCS with PARS and intelligent barcodes. Although I did find the pneumatic tubes interesting.

2. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
Why would they even invest in the Chevy Equinox? That vehicle is just way too large to be useful as a mail delivery vehicle. One question I have is could the new 2 person model segway be useful for mail deilvery or maybe even smart cars or mini-coopers? USPS think smaller and efficient, not bigger with heavier payloads! The smaller vehicles could also be hybrids or fuel cell too if the technology is there or maybe even convert them to CNG. I would highly recommend they re-work their trucking fleet to run CNG or Bio-diesel too!

3. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
*USPS is a private, not government entity. *All of the huge SUVs would be stupid for mail delivery. Too large to manuver.

4. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
Website: http://www.findingdulcinea.com/news/on-this-day/May-June-08/On-this-Day–U-S–Postal-Service-Attempts–Missile-Mail–for-First-and-Last-Time.html
Nice feature ! According to this story, missile mail was never expected to be feasible, but rather was a way for the Dept of Defense to show off our missile capability during the cold war. http://www.findingdulcinea.com/news/on-this-day/May-June-08/On-this-Day–U-S–Postal-Service-Attempts–Missile-Mail–for-First-and-Last-Time.html

5. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
the Postal Service is full of idiots. They waste money and are losing billions of dollars. This article is a perfect example of why they are doing so poorly. Typical Government entity, overpaid and wasteful.

6. RE: 10 Geeky Ways to Deliver Mail: U.S. Postal Service Technology
i wish my mail carrier would read this. my mail keeps arriving soaking wet. bring back the burro!

Tags: Advertising, Direct Mail, direct marketing association, Jack Potter, junk mail, Letters, Mailing, Marketing, Money, new postal regs, non profits direct mail, Philadelphia, Philadelphia Post Office, Postage, postage increase, postmaster, Savings, USPS, usps regulations for flats

People Try Twitter One Month, Then Fly

From PC World Wednesday, April 29, 2009 4:22 AM PDT
It’s good to know I am not alone: Many other people use Twitter a few times and can’t think of a good reason to come back. With all the hype about Twitter’s 140-character version of living, I’d gotten the impression that I’m the only one on Twitter who doesn’t get why Twitter matters.

Not so, according to Nielsen data that shows 60 percent of people who use Twitter one month, even at its peak popularity, don’t come back the next. While it used to be that 70 stayed away that improvement is not much to brag about–Twitter’s customer retention is prone to peaks and valleys.

Twitter needs to be concerned about this, especially since both MySpace and Facebook have failure to return rates only about half that of Twitter. Put another way, 60 percent of MySpace and Facebook users come back the next month, about the same percentage that do not return to Twitter on its best months.

It is easy to think of reasons for this. Twitter is a one-trick pony. If you do not like tweeting or reading the tweets of others, there are not a whole lot of reasons to return.

Both MySpace and Facebook, for all their problems, offer more services than Twitter. It is easy to see how places where users can do more things could make the two services “stickier” than Twitter.

This does not surprise me. Twitter feels really light to me. Some people, obviously, become addicted but large numbers of others just walk away. That is not such a big deal right now as Twitter is in major growth mode. Growth hides all manner of sins.

However, if that growth mostly results in new users sampling and leaving, the growth will not last. Worse, it may be hard to get those unhappy users to return should Twitter ever expand its product features.

It is not clear whether Nielsen’s measure of Twitter’s return rate counts people, like me, who use a third-party application for their twittering. I do not return to Twitter nearly so much as I return to TweetDeck.

Today, it would be much easier for TweetDeck to make money off my use of Twitter than it would be for Twitter itself. Again, I do not see how these social networks ever make the big money that investors are betting they will.

To be honest, I am using Twitter mostly because I think “it’s good for me,” like some sort of social network vitamin. Like most good intentions, it will be interesting to see how long that lasts. Nevertheless, I am pretty certain to make it into next month.

I’m sure Twitter will be happy.
David Coursey tweets occasionally, and reached by e-mail using www.coursey.com/contact.

Tags: Add new tag, Direct Mail, Direct Marketing, direct marketing association, Jack Potter, junk mail, Letters, Mailing, mailing services, Money, move update, Move Update Requirements, new postal regs, non profits direct mail, one code, Philadelphia, Philadelphia Post Office, Postage, postage increase, postmaster, Savings

Another Delay for Intelligent Mail?

From the Dead Tree Edition
Monday, April 27, 2009

With the Intelligent Mail Barcode (IMb) program veering off the tracks, prominent mailers called for the U.S. Postal Service to hit the brakes today on the much-delayed program.

“There is a general consensus that even if the USPS stays with their commitment of May 18 it will be almost impossible for the program to begin in a successful manner,” says a memo written by Jack Widener, a respected industry consultant, that Idealliance released today to its members. Widener, a former Newsweek executive, chairs the IMb users group for the major trade association.

Dead Tree Edition has previously noted that IMb, a major strategic initiative for the Postal Service, is “a train wreck waiting to happen” because of failures in coordination, communication, and planning.

Mailers and their vendors complain that the rules and procedures for IMb are still in a state of flux. Even today, the complex and critical “Service Type Identifier Matrix” in one USPS document contained the qualifier, “Final Revision will be completed as soon as possible.

“When will the changes stop so the program can by implemented by USPS,” Widener wrote. “There are 11 open issues that are not assigned and that must be resolved with only 21 days to go.”

Among the “show stoppers” listed by another report Idealliance sent to members today is one that would force Periodicals-class co-mail participants either to “leap to electronic payment without sufficient testing or pull out of co-mail/co-pall.” The report lists other restrictions for various classes of mail on co-palletization, co-mail, palletization, and firm bundling that would result from glitches in programs related to IMb.

Perhaps postal executives realize, Widener writes, what even their underlings admit — that USPS will not be ready on May 18 date.

If so, he argues that they should “tell us now so that all can plan accordingly and alert their customers and suppliers in the mailing supply chain. And don’t blame it on their customers; if they do this it will be not due to lack of mailer preparation. We have spent hundreds of thousands of dollars and invested people’s time to implement as soon as information was received from the USPS. But we must be given adequate time to implement the numerous changes that are happening.”

Tags: Cost, Direct Mail, Direct Marketing, direct marketing association, intelligent mail barcode, Jack Potter, junk mail, Letters, Mailing, mailing services, new postal regs, non profits direct mail, Philadelphia, Philadelphia Post Office, Postage, postage increase, postmaster, Savings

Publishers Seize on iPhone as Great White Digital Hope for Print

Industry Progressing from Replicas of Issues to Formats Better Suited to Small Screen
by Nat Ives

Published: April 27, 2009

NEW YORK (AdAge.com) — Can the Jesus phone resurrect print’s hopes for paid digital content?

Several players, from ambitious software developers to arcane auditing bodies, are suddenly converging this spring to hasten the arrival of a long-awaited “iPod for print.” It might just be the iPhone.

So far magazines and newspapers have built applications chiefly for the iPhone — and the surprisingly popular iPod Touch — that riff on their core editorial missions. Witness Condé Nast Digital’s Style.com app, which plays video of Fashion Week runway shows, or Lucky magazine’s shopping app, which helps users find nearby stores with certain shoes or bags in stock.

The Style.com app has been downloaded 230,000 times since its introduction last August, according to Drew Schutte, senior VP-chief revenue officer at Condé Nast Digital. And it represents the first way publishers are making money from apps: by selling ads or sponsorships on them. The Style app, free to consumers, served 2 million ad impressions for marketers such as H&M in the first quarter of the year.

“Ever since the iPhone came around, it turned the mobile-advertising opportunity from something really stiff, cramped, awkward and slow into something beautiful, sexy and fast,” Mr. Schutte said.

About 90,000 people have downloaded the free “Lucky at Your Service” app since its debut just two months ago. It’s a brilliant brand extension, another way publishers want apps to further their business.

Commerce
Some publishers also want to facilitate commerce — in exchange for a cut of the revenue. “Certainly there’s an opportunity on your iPhone, whether it’s stuff like buying movie tickets or buying products,” Mr. Schutte said. “We’re just beginning to explore it.” Lucky offers advertisers participation in “Lucky at Your Service” as added value for in-book advertising.

But many publishers would also like to turn iTunes into a virtual newsstand and subscription hub. It’s immensely popular, and people like buying things there. What better place to try to give paid circulation a foothold in digital?

Selling magazines through iTunes might have promise, depending on execution, audience and other factors, publishers said. “ITunes is a great marketplace for entertainment, movies, music, TV, even books. Magazines are actually conspicuous in their absence,” said Ryan McConville, publisher of the Bauer Teen Group, whose titles include J-14 and Twist. “If teens are already there buying Miley Cyrus records and episodes of ‘The Hills,’ it’s not a stretch to think they could just as easily be buying copies of J-14.”

The Wall Street Journal, for example, plans to start charging for some of the content people get from its free app, which it upgraded earlier this month. But that app pulls news content from the web. Selling digital editions of print issues, certainly magazines’ chief asset, has had limited prospects until now.

On one hand are digital replicas of magazines for the iPhone and iPod Touch, which not many people like reading, even according to companies that offer apps to that end. “The digital edition as it currently exists, as a replica, has great value for some percentage of the population — a small percentage,” said Cimarron Buser, senior VP-marketing and business development at Texterity.

“We don’t think that the digital-replica model is the business of the future,” said Jeanniey Mullen, exec VP-chief marketing officer for Zinio.

Race to the phones
On the other hand, translating print issues into versions better suited for the iPhone also faced several hurdles.

First there was the technical heavy lifting required. But now Texterity, Zinio and a developer called Bite Sized Candy are each racing to deliver new systems to put issues in better formats. They all said they’ll introduce their systems this year; Bite Sized Candy said it’s shooting for summertime. “The goal is to extend the reach of publications through the iPhone via iTunes,” said Parie Markowitz, managing partner at Bite Sized Candy.

Then there was the problem of the small screen, a concern even if one didn’t try to sell page-by-page replicas. The apps in development, however, already look better than anticipated. “I’ve been impressed with some of the examples and apps that I’ve seen, and I didn’t expect to be,” said Sean Nolan, VP-online operations at Rodale, publisher of magazines including Men’s Health, Prevention and Runner’s World.

“Like a lot of things on the iPhone, it’s tough to describe but cool to experience,” he said. “Having the product load locally on the device, rather than through a wireless connection or Safari, is a big key for the user experience. It loads quickly and allows you to page through, item by item, from a standing menu. It’s not as image-driven as a magazine, but then it shouldn’t be.”

Publishers are also worried about advertisers, whose revenue was too important to leave out of the equation.

Replication challenge
Until recently the Audit Bureau of Circulations, the dominant referee of magazine and newspaper circulation, let publishers count digital editions toward their “paid” circulation only when those digital editions precisely reproduced each printed page. A non-replica — with all an issue’s contents but laid out specifically for the iPhone — did not count as paid, the kind of circulation advertisers most want to buy.

This spring, however, the bureau voted to allow nonreplica versions to be reported as paid. Publishers still aren’t allowed to count non-replica digital versions toward their paid-circulation guarantees, a basic metric for negotiating ad rates, but the bureau is already talking that over.

That means publishers looking to sell issues through iTunes will soon have just one hurdle left: consumer demand. If readers like using iPhones to buy the March issue of Gourmet or a year’s subscription to Fortune, advertisers will come along.

“Certainly, on paper, everything that’s just been talked about makes all the sense in the world,” said David Leckey, exec VP-consumer marketing at American Media, publisher of Star and Shape, as well as a vice chairman at the Audit Bureau. “Whether it should go there or not, I think, will ultimately be the consumer’s decision.”

The potential isn’t clear today, said Rodale’s Mr. Nolan. “What we do know today is that, despite the rumors of its demise, print is not dead,” he said. “And we also know that people are consuming more branded content, not less, which is good news for us. But the new wrinkle is how they’re consuming it. It’s print, yes, but also iPhone, Kindle, BlackBerry, syndication, YouTube, Hulu, Facebook widgets, on-demand web video via the PC and so forth. So our goal is to test and learn and understand what our audience wants, when they want it, and how they want it. As distribution channels evolve and change and fragment and Long-Tail, we intend to follow them and ensure we continue to deliver our premium consumer content.”

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Chinese postal worker sentenced to death for $265m embezzlement

I guess that would be a deterrent to further crime…
April 26, 2009
From the Sydney Morning Herald
A POSTAL bank official in southern China was sentenced to death for siphoning more than 1.3 billion yuan ($265 million) to pay her gambling debts.

State media reported yesterday that He Liqiong, 45, was given the death penalty by a court in Guangdong province. She was convicted of siphoning deposits from a post office bank in Foshan city to pay off debts incurred whilegambling in casinos in neighbouring Macau.

Officials gambling away public funds in Macau have become a headache for Chinese authorities. Several corruption incidents have been linked to gambling.

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NZ Post completes NZ$200 mln sale of 7.5% bonds

Now this sounds like an excellent idea USPS anyone reading this???
17:53 April 24, 2009Article
Article – Businesswire

April 24 – New Zealand Post Group Finance completed its NZ$200 million sale of bonds that pay 7.5% annual interest.

NZ Post completes NZ$200 mln sale of bonds paying 7.5%
April 24 – New Zealand Post Group Finance completed its NZ$200 million sale of bonds that pay 7.5% annual interest.

The notes pay annual interest through until Nov. 15, 2014, the reset and step-up date. The initial margin is 2.8%, the postal service’s finance unit said in a statement. The debt matures in November 2039.

All NZ$200 million of the notes were sold to clients of investors who participated in its bookbuild. The sale was for NZ$150 million of notes, rated A by Standard & Poor’s, with oversubscriptions of NZ$50 million.

NZ Post chairman Jim Bolger the postal service is “delighted with the positive reception to this offer and the large number of investors who participated in the offer, which maintains New Zealand Post’s very strong financial position.”

The notes are expected to begin trading on the NZDX market on April 27. NZ Post joins corporate including Contact Energy in selling debt securities, taking advantage of dwindling deposit rates, which spur demand for fixed-income returns.

(Businesswire)

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Survey: CMOs Not Happy With Digital

April 18, 2009
By Todd Wasserman

CMOs see digital as the medium of choice in this economy, but aren’t getting what they want out of it, according to a new survey from Heidrick & Struggles.

In December, the Atlanta recruiting firm polled 111 senior marketing executives at firms with $1 billion or more in annual revenues about their digital strategies. The impetus, said Lynne Seid, partner in the firm’s global consumer practice, were comments from H&S clients expressing frustration over the fact that so much information exists online about consumers—like their search and social media behavior—and yet marketers felt they were accessing it poorly.

Information on existing customers is especially valuable since in the current down economy, many are focusing on retaining such customers, and cross-selling and up-selling to them, in addition to trying to win over new customers.

Respondents to the survey found their current ability to access ROI and metrics on their digital marketing lacking and rated their companies behind the curve. Many said they would have to look outside the company for help, whether that means hiring new employees or relying on ad agencies—though the marketers said they weren’t happy with their current agencies either.

Time after time in the survey, marketers expressed an awareness of digital’s potential along with a recognition that they weren’t close to tapping it.

For instance, one of the selling points of digital media is its ability to let marketers respond quickly to new opportunities, but only 16 percent of respondents rated themselves “very satisfied” with their ability to do so. Fifty-one percent said they were “somewhat satisfied.”

On a more granular level, the respondents rated marketing ROI, Web behavioral analyses and CRM as the most important parts of their digital marketing mix. Not many marketers thought that they were good at those functions at this point. Only 18 percent said they were “very satisfied” with their ROI analysis, only 13 percent said the same of their CRM program and 19 percent were happy with their search engine optimization.

There was also some debate over who has responsibility for analytics like Web traffic and usage reports. Most marketing departments are currently handling those functions, but they would like to fob it off on IT. Though search marketing also scored high, pulling up the rear on that list were blogs, social networking tools and mobile advertising.

On the bright side, most respondents thought they had Webinars down pat and they were fairly confident in their ability to execute online surveys and contests. On the other hand, most rated their ability to pull off mobile ads and video ads fairly low.

For what ever reason, marketers think their companies are behind the curve on digital marketing, but they don’t see themselves that way. “That’s called ‘irony,’” Seid said. Their agency partners are another story. Fifty-five percent disagree with the statement: “We trust our ad agency partner to provide us with the digital marketing expertise that we need.”

Seid said the big takeaway from the survey is that there’s still enormous room for improvement for most companies’ digital marketing strategies.

“What I’m hearing anecdotally is there are now sometimes half a dozen digital agencies and suppliers specializing in social media and search,” Seid said. “We don’t have anyone managing, integrating and demanding best practices in those areas.” Seid envisions a “digital CMO” taking responsibility for managing those disciplines. Said Seid: “That will be the CMO of the future.”

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Old Navy, Chrysler, Palm among Top 12 Brands Likely to Disappear

My kids are going to freak when they see crocs are on the way out, although even they have not bought any new ones, nor asked for them in more than 6 months, an eternity in marketing years. Still, it’s sad to see them go…

From Marketing Charts, April 20, 2009
As the recession deepens, economic forces continue to drive consolidation in the retail industry, debt comes due and increasingly discerning consumers buckle down on discretionary spending, an analysis by 24/7 Wall Street predicts that a number of well-known brands are likely to disappear before the end of 2010.

To determine which brands are most likely at risk, 24/7 Wall Street examined 100 large brands it believes are in trouble and, for each, looked at public financial records, sales information, analyses from industry experts, the competitive landscape in each’s industry and the likelihood that a brand could be sold off in the case of parent-company financial trouble.

The analysis points to the most serious peril for the following 12 brands which, 24/7 Wall Street says are most likely to disappear by the end of 2010:

1. Budget rental cars: Though Budget’s parent company currently says it will continue to operate both the Avis and Budget brands, increasing debt problems, a weakening travel industry and intensifying competition will nonetheless cause the demise of the Budget brand, 24/7 Wall Street predicts.

2. Borders books: Declining sales, heavy losses and pressure from competitors Barnes & Noble and Amazon – especially from new e-book readers – may prove too much for the brand when large amounts of debt come due in April 2010.

3. Crocs footwear: The decline in stock price from $72 per share in late 2007 to $2 today, ongoing financing issues, consumer belt-tightening and the end of a fad, leads to to 24/7 Wall Street’s declaration that “Crocs won’t make it through the year.”

4. Saturn vehicles: As General Motors faces bankruptcy, 24/7 Wall Street said it will almost certainly shutter the brand, whose sales dropped 59% in the first quarter of 2009.

5. Esquire Magazine : While the Esquire brand is plagued with ad revenue declines and intense competition in the crowded men’s-magazine market, parent company Hearst faces problems on both the newspaper and magazine fronts and will not hesitate to close down underperforming brands such as this one to bolster its overall position.

6. Old Navy apparel: 24/7 Wall Street said that parent company Gap – which currently markets the Gap, Old Navy and Banana Republic brands – is “a three-brand company living in a two-brand body” and cannot continue to sustain all three in the midst of steep, across-the-board sales declines. Old Navy, which is the weakest brand, will most likely not survive.

7. Architectural Digest Magazine: Amidst drastic cutbacks in high-end home sales and expensive redecorating, the once-healthy publication has lost 47% of its ad pages this year. Faced with other financial problems in its newspaper and magazine businesses, parent company Conde Nast will not be able to sustain the brand, according to 24/7 Wall Street.

8. Chrysler brand cars: Facing similar problems to GM as it teeters on the edge of bankruptcy, Chrylser LLC will not be able to support product design, manufacturing and marketing for a brand with many less sales that Dodge or Jeep as it gears up for restructuring.

9. Eddie Bauer: Faced with declining sales, a stock price under $1, major debt problems and a CCC- rating, analysts say its lack of differentiation in the marketplace could prove the last straw. 24/7 Wall Street said it could be out of business by mid 2009.

10. Palm: A brand that 24/7 Wall Street says has been “at death’s door for some time,” faces life-threatening competition from RIM and Apple, and can only survive in the unlikely event that it can expand the smartphone market by increasing demand for its “Pre.” Dismal financial results and association with Sprint, the already-#3 US wireless carrier, will spell complete disaster.

11. AIG: The once-venerable insurance giant’s highly publicized financial problems, involvement in the financial crisis and subsequent bailout and indebtedness to the federal government, make it the “one large brand in America which almost everyone would like to see disappear,” according to 24/7 Wall Street. Because many of the company’s operating units do not bear the AIG name, they will continue to do business as they distance themselves from the “toxic” AIG parent brand, which eventually will go away.

12. United Air Lines: As the travel industry faces unprecedented overcapacity in light of the recession, two of the large US carriers will soon need to merge to avoid bankruptcy. While it is not clear yet how such a consolidation will shake out, the stocks of UAL, American and US Air have plummeted. 24/7 Wall Street believes that United – the weakest of the carriers, soon faces a “merger,” which will most likely mean the end of the line for the brand.

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