Welcome to the Talon Mailing & Marketing February 2011 Newsletter.
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Good News for Mailers Along With the
In announcing rate increases recently, the
U.S. Postal Service actually managed to win praise from many mailers.
Standard mail will actually see small rate decreases.
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
“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
"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
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
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
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
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
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
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
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
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.
Repair Shop Triples Business Through Postcards
by Larry Riggs,
Postcard mailings have helped All-Star Auto
Repair triple sales to prospects in their surrounding three-mile
"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
Talon has great seats for you to win.
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Islanders vs. Los Angeles Kings
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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!
Mike Borkan's Links - Web sites you probably
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