Key Notes Vol. 02 No. 03

Postal Rate Increase Is No Surprise. But Why Now? – Key members of the mailing community were not surprised that the U.S. Postal Service took the inflationary rate adjustment it would customarily have asked for months ago, and they were not alarmed at the 2% hike. They just wanted to know why the Postal Service couldn’t have held off for a few more weeks to learn the D.C. Court of Appeals decision on whether exigency will stay or go. “We know the appeals court is going to release its decision soon. We would have preferred they waited for that and then ask for the CPI increase in June or July,” said Hamilton Davison, president and executive director of the American Catalog Mailers Association. “The rate issues would be more settled then and it would give mailers a longer period of stability with which to plan their mailings.” Source: DM News

Winning Recipe at Meredith – Meredith’s digital-to-print experiment has proven to be a success for Allrecipes, which launched its first print edition to an audience of 500,000 in November 2013. After just one month, the company increased its rate base by 150,000 copies and then raised it again in September 2014 by another 250,000, bringing the total to 900,000.  This week, the magazine announced it will send out an additional 200,000 copies of its February/March issue, effectively raising its rate base to 1.1 million. The latest hike for the bimonthly magazine marks a growth of 120 percent after only eight issues. [Editor: Print isn’t dead! Read next article.] Source: FOLIO:

Catalogs Still Part of Our Digital Lives – We supposedly live in a digital age, but almost daily catalogs and sales circulars show up in our mailboxes and on our driveways. Well, get ready for even more. J.C. Penney Co. has decided to revive its catalog business, with the first one expected to be delivered in March. Why would the struggling retailer got back into catalog sales? They click with some shoppers. “Customers, particularly when it comes to looking at home merchandise, still like flipping through a traditional print piece but then they go to jcp.com … to order the item or go into our store,” J.C. Penney spokesperson Kate Coultas told Entrepreneur. “It’s a traffic driving, marketing piece.” The number of mailed catalogs rose slightly in 2013 to 11.9 billion, the first annual increase since 2006, The Direct Marketing Association says. Catalog mailings peaked at 19.6 billion in 2007. Sources: Market Watch & Chicago Sun Times

What the Latest USPS Rate Hike Means for Magazines – After the latest USPS rate hike, it’s going to cost more to ship magazines to your subscribers. But it might not stay that way. The USPS announced a rate increase last week intended to keep mailing prices in line with inflation—a jump of about 1.9 percent across the board. While periodicals as a whole, will be 1.965-percent higher, accompanying changes mean that some magazines will be treated differently than others. A few publishers will see price reductions of more than 20 percent, while others will have their mailing costs rise by up to 100 percent. “The postal service is making more changes to the rate design than in past years. In the case of periodicals, there are a number of new rate cells and preparation requirements that’ll be going into effect,” says Rita Cohen, senior vice president of legislative and regulatory policy for the MPA. “That makes it very hard to analyze what the impact is going to be on operations and pricing. So we’re working with printers and other supply-chain providers to figure out some of the data that’s missing. We know that, overall, the postal service asked for the allowable CPI increase on periodicals, but we don’t know exactly what it means for individual publishers.” Source: FOLIO

How to Integrate Direct Mail Marketing in the Digital Era – Business mailing lists still rank among the most customizable and therefore most effective methods for messaging an audience of potential customers. Direct mail may not necessarily be the cheapest, but cheap marketing doesn’t always make for a great customer engagement. According to a study conducted by Hubspot, direct mail yields an ROI of $27 for every dollar spent. That’s pretty good by any account, although it’s not as good as the $2,600 ROI of email marketing, which that same study claimed. Direct mail is however, still effective for a couple of reasons. One, it is possible to use the information and data included in business mailing lists to establish the benchmarks for new campaigns. Second, it’s great for retailers looking to bridge the gap between their storefront and their website. The takeaway from this is to initiate marketing strategies that use direct mail to both circulate brand awareness while directly referencing websites. A couple of ways to accomplish this is by adding QR codes with embedded tracking codes, or include exclusive coupon codes in the mailer. Source: B2C

Pulp & Paper Industry Sees More Than 60 Mill Closures in Past Year – More than 60 pulp and paper mills were closed and 33 idled production from 2013-2014. These and other important changes in global pulp and paper mill production were published recently in the Lockwood-Post Directory. The directory is produced by RISI, the leading information provider for the global forest products industry. “Understanding mill operation globally is critical for those competing for business in the industry. The Lockwood-Post Directory enables its readers to track critical changes that are taking place among the world’s most influential mills,” said Jon Rager, Senior Vice President of Analytics and head of the Mill Intelligence Services division at RISI. Source: RISI

Lawmakers Call Postal Reform a Priority – Oversight leaders in the new Congress have promised a renewed focus on reforming the U.S. Postal Service, but the usual obstacles are already taking shape.  Reps. Gerry Connolly, D-Va., and Sam Graves, R-Mo., have introduced a resolution [H.RES.12] calling on the Postal Service to “take all appropriate measures” to continue to deliver mail six days each week. Eliminating Saturday mail delivery — while continuing six-day package delivery — has been perhaps the most significant hurdle preventing an agreement on postal reform. Postal reform bills in both the House and Senate during the last Congress would have, eventually, allowed USPS to stop delivering mail on Saturday, but neither advanced further than their respective committees. USPS management attempted to move to five-day delivery unilaterally in 2012, but that effort was stymied by the Government Accountability Office, which cited a rider requiring six-day delivery included in every spending bill since 1983. Rep. Mark Meadows, R-N.C., who heads the House Oversight and Government Reform Subcommittee on Government Operations — which has the Postal Service under its purview now — called reforming the cash-strapped agency a priority. The committee must “find consensus to move it forward,” Meadows told Government Executive. “We need to deal with it sooner than later.” Source: Government Executive

Divergence of Digital and Hard Media – In his blog posted on WhatTheyThink, Dr. Joe Webb shows the relationship of the CPI and the Producer Price Index (PPI) for the US Postal Service, computers, wireless communication, and commercial printing. According to Dr. Webb, the USPS pricing is running higher than the CPI, and printing prices are lagging. That means, strangely enough, that printing is getting cheaper every day, because those price increases are half the rate of the increase in CPI. It also means that USPS prices “crowd out” other resources in mail project budgets, placing downward pressure on print prices, as well as pushing down run lengths, page counts, sizes, and frequencies. Source: WhatTheyThink?