Talon Mailing & Marketing

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Welcome to the Talon Mailing & Marketing February 2011 Newsletter.

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Good News for Mailers Along With the Rate Hikes

from deadtreeedition.com

In announcing rate increases recently, the U.S. Postal Service actually managed to win praise from many mailers.

It’s not that the new rate structures scheduled to take effect April 17 are particularly innovative. In many cases, they are merely less bad than other recent Postal Service price moves, both actual and attempted.

What especially pleased the mailing industry is that "Elephant Plaza," as some refer to the USPS HQ at L'Enfant Plaza, showed yesterday that it is actually listening and responding to mailers, especially in regard to the flawed Intelligent Mail program. We got a hint of that last week with Postmaster General Pat Donohoe’s executive reorganization (see Donahoe, No Potter Clone, Quickly Making His Mark), but the signals were even clearer Thursday.

“Recognizing ongoing concerns about mailers’ readiness for broader adoption of the Intelligent Mail barcode (IMb, which Dead Tree Edition has relabeled as the FUBAR code), the USPS has decided that automation discounts for mail with POSTNET barcodes will continue to be offered beyond May 2011,” a USPS announcement said. In other words, mailers will not be severely punished (yet) for sticking with traditional barcodes.

A postal executive also acknowledged to a mailing industry briefing that the PostalOne! information system, which many mailers and mail vendors have to use and suffer through, is a mess. “No s*%t, Sherlock!” one publishing executive responded later. Also, Donahoe originally told mailing industry representatives yesterday morning that the new rates would take effect March 27, but they persuaded him that was too soon to implement.

"Overall, it was an incredible breath of fresh air for the mailing industry," Hamilton Davison, head of the American Catalog Mailers Association, wrote to ACMA members. "The meeting signaled a real willingness on the part of Mr. Donahoe and the USPS to work on substantive issues and customer concerns. This is exactly the right move for a high fixed-cost institution that ultimately must grow its way out of financial difficulties."

The rate filing included two changes from past practice that will put millions of dollars more of mailers’ money into Postal Service coffers. The rates will take effect a month sooner than previous rate increases. For future years, the Postal Service plans to continue implementing new rates in April rather than May.

Also, the price cap was calculated based on annual changes in inflation through November 2010. If the Postal Service had followed its usual practice of waiting for today’s release of the December 2010 Consumer Price Index, the rate cap would have been 1.64% instead of 1.741%. (See USPS Delay Means Smaller Price Increases for Mailers for background on the timing issue.)

The new Periodicals rates don’t really fix any of the problems with the current rate structure, but at least they won’t exacerbate the problems much. The 9.8-cent gap between the Basic Carrier Route and 5-Digit Automated piece rates will be maintained, which is good news for co-mailing publishers (and for the printers that run co-mail operations).

Still, efficient mailers will take a bit more of a hit than average once again, with rate increases for some approaching 2.5%. (Do Postal Execs Want To Lose Money on Periodicals? Tough Question #4 For USPS has more background on this tendency with Periodicals rates.)

The Postal Service has made noises about encouraging the use of pallets and of dropshipping, but that hardly showed up in the new rates. There is still no meaningful discount for using Network Distribution Centers, which would encourage dropshipping by small publishers. And the rate increases for sacks were all below the 1.767% average for Outside County Periodicals.

All individual Outside County Periodicals rate changes will be in the narrow range of 0% to 3%.

Most efficient catalog mailers will also be hit a bit harder than inefficient ones. The average increase for Basic Carrier Route sent via Standard mail will be 1.4%, versus only 0.8% for non-Carrier Route Standard flats. Some catalogs and free publications that use
Standard mail will actually see small rate decreases.

Ads in Bank Statements: Latest Targeting Controversy

by Karlene Lukovitz, Marketing Daily

A new controversy about behavioral data-driven ads for McDonald's, Staples, Macy's and other brands now showing up in online bank statements is less-than-ideal timing for the advertising industry, to put it mildly.

The new channel -- a moneymaker for banks that's reportedly working extremely well for participating marketers -- generates ads, most often associated with discount and coupon offers, that appear in online debit card activity statements. The ads are based on a user's debit card transactions, and don't necessarily come from a company from which the consumer has purchased. For example, debit card charges at one fast-food chain might trigger an ad from a competitor.

The test results thus far are impressive. Software firm Cardlytics, which was first to offer a transactionally based ad-generating service to banks (a growing number of others are now also in the game), told The Washington Post that more than half of users click on a link to activate an offer within the first month, and that advertisers are realizing an average sales lift of $5.49 for each dollar spent on marketing to existing customers.

A McDonald's test in Houston showed nearly one in five consumers who had been eating at competing restaurants, redeemed a cash-back offer for a McDonald's meal, and 60% of those who had used debit cards to buy $75 or more on fast food during the previous three months activated the offer, the Post reported.

The system suppliers have stressed that customers' personal data is not shared with marketers, and that customers can opt out of having the ads appear in their statements.

However, consumer privacy protection groups contend that most consumers don't notice, understand or take advantage of opt-outs.

Furthermore, while many consumers are clearly taking advantage of the offers, a growing number of articles in well-read news outlets bearing headlines like "Advertisers Monitoring Your Debit Cards?" are also generating negative viral attention for both banks and participating marketers.

In another sign of growing consumer awareness and concern about online privacy issues, in December, a New York City resident filed a class action suit in Federal Court alleging that McDonald's, CBS, Mazda and Microsoft engaged in illegal personal data-mining activities during campaigns, according to Courthouse News and QSR.com. The suit seeks statutory and class damages for computer fraud and abuse, violations of the Electronic Communications Privacy Act and of state business law, trespassing of personal property, breach of implied contract and interference with the contract. It also asks that the companies named be prohibited from using the data-mining tactics in question in the future (all worked with Interclick, but Interclick is not named as a party in the suit).

Such attention comes at a time when advertising industry groups are urging their marketer and agency members to implement a self-regulatory online behavioral advertising (OBA) program, in the face of growing threats of government intervention. The Association of National Advertisers this week issued such a call, along with supplying a toolkit to help members implement the program, which was developed by a coalition including the ANA, 4As, the American Advertising Federation, the Direct Marketing Association and the Interactive Advertising Bureau, and is supported by the Council of Better Business Bureaus.

Demonstrating rapid, significant progress on this front has become increasingly urgent for the industry in the wake of the Federal Trade Commission's proposal, released in December, for a do-not-track mechanism that would continuously alert ad-tracking and targeting firms that a consumer does not want to be tracked or receive targeted ads. Comments on the proposal are due January 31, and the FTC will release a report during 2011.

In addition, while a U.S. Department of Commerce report on commercial data privacy also released in December expressed support for self-regulatory programs, "additional legislators are piling on with new privacy bill proposal plans," pointed out marketing writer Kate Kaye, in a recent ClickZ.com article summarizing the online privacy scenario for 2011.

Kaye points out that the industry's initiatives were already well underway prior to the FTC's do-not-track proposal, with beta testing of its system for educating and providing consumers with an online advertising opt-out in progress and the largest digital media-buying firms on board. "Though legislators have taken action by holding hearings and introducing a privacy bill, and regulators have disseminated lengthy reports on the need for more consumer data usage transparency and privacy protection, the industry is ahead of government when it comes to actually developing tangible solutions," Kaye stressed.

However, "the question remains whether the alliance's program, or browser-based methods providing more control over third-party tracking and targeting planned for Microsoft's Internet Explorer and, reportedly, Mozilla's Firefox, will satisfy lawmakers and regulators," she added.

One potential issue: The FTC is proposing that consumers be provided with opt-out capabilities going beyond online ad targeting, to encompass all tracking by third-party ad and data firms.

Car Repair Shop Triples Business Through Postcards

by Larry Riggs, Chiefmarketer.com

Postcard mailings have helped All-Star Auto Repair triple sales to prospects in their surrounding three-mile area.

"We wanted to reach those people who are in a three mile radius—that's where 80% of your customers are anyway," says Bill Buchheit, owner of the Columbia, MO-based car repair shop.

On average, All-Star sends 12,000 postcards per month to local households with incomes of between $40,000 and $60,000 a year who have been identified as owning at least one car.

Population density mattered in All-Star's efforts. Columbia has a population of 102,324, which isn't very dense, he notes, adding that if the business was based in a  more heavily populated area like St. Louis he would have mailed to a closer geographic range.

The postcards offer such things as oil changes and $20-off coupons for service over $100. The prices change depending on the time of year.

"If it's summer time, I really don't need as many customers," he notes, adding that attracting too many customers might mean his staff of mechanics would get overworked. "In winter I'll drop it down to $19.95 or $17.95, trying to attract more cars."

In the past, All-Star didn't really do any marketing.

"I didn't do hardly any advertising," he says. "I thought that referrals were the way to build a business."

All-Star has a Web site where customers can make appointments, get information about repair services and print out coupons. It also does a little local radio and Yellow Pages advertising, and has a Facebook presence Buchheit thinks will pay off way down the road.

"I don't really think Facebook is having much of an impact now," he says. "The kids that are using it now are our future customers in the next five years." 

  Ticket Giveaway!   

Talon has great seats for you to win.

We are giving away a pair of tickets to see the New York Islanders!  To win, be the first telephone caller (please don’t hit reply or email). Voicemail messages count so it's fine to leave a message.   Call Michael Borkan at 631-667-5500 x 11. 

  • Saturday, February 19th, 7:00 PM.  Islanders vs. Los Angeles Kings

Do you know of anyone else who would be interested in receiving our newsletter?  Please let us know by email:  mb@talon-mailing.com

To learn more about our company, please visit our Web site: www.talon.com or contact Michael Borkan at (631) 667-5500 x 11.

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In this Issue:

Good News for Mailers Along With the Rate Hikes

Ads in Bank Statements: Latest Targeting Controversy

Car Repair Shop Triples Business Through Postcards

Islanders Ticket Giveaway!

New Clients

Mike Borkan's Links - Web sites you probably haven't seen

View Samples of Our Work

Newsletter Archives

Direct Mail Humor!

New Clients:

Talon welcomes the following new clients this month to our growing roster of customers:
  • NextGen Telephone

  • Clintrak Clinical Labeling Services

  • 2 New Lists from Statlistics

Mike's Favorite Links:

Some interesting links...

Charitybuzz.com - Bid on top celebrity experiences and memorabilia in their gala online events.  All money goes to charity!

Dropbox.com - The easiest way to store, sync, and, share files online. There's no complicated interface to learn.

Simplenoteapp.com - An easy way to keep notes, lists, ideas, and more.

Milo.com - Milo searches the shelves of local stores in real time to find the best prices and availability for the products you want to have - right now.

Awkwardfamilyphotos.com - If you think your photos are bad, check these out.

Work Samples:

Did you know Talon offers the following services? 

Click on the links below to see samples.

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