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Second Half of 2024 Will Give Marketers A Run for Their Money! (Conclusion)

by Digital MarketingDirect MailMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Key Event #2: Shortened Holiday Season 2024

Thanks for following along in our series of key events in the second half of 2024. It’s hard to believe it’s already mid-October! Today, we’re going to discuss the impacts of the shortened holiday season, how to combat them, and what you may do afterwards to kick 2025 off on a good note.

As you know, the holiday season is the most important time of year for most marketers. However, did you know there will only be 27 days between Thanksgiving and Christmas this year? This is the fewest possible number of shopping days for the traditional holiday season. Therefore, marketers need to be extra prepared for the shortened shopping season to ensure you get the sales you need.  

This summer, we talked about the election. It’s important to note that consumers will be fresh off the election (which, as a reminder, they are preoccupied about the economy, macro effects, and more).   

So What? 

This shortened season really will have an impact on both consumers, and you as marketers. However, history is on your side! 2019 was the last time consumers had a 27-day holiday shopping season, which was also pre-Covid. By having a pre-Covid time to look back, it’s likely that shoppers will follow similar shopping trends as they did then.

What You Need to Know:

When there is less time to shop, consumers have historically started their holiday shopping earlier. In fact, Epsilon reported that higher revenue was generated two to three weeks leading up to Thanksgiving and the two weeks afterwards (when comparing 2019 to 2023).

Our Recommendations: 

Be strategic with this shortened shopping time frame. Manage shipping deadlines; stay vigilant about inventory; execute campaign launch dates; and optimize circulation plans.

Begin marketing communications earlier than usual. This will be key to sustaining and/ or growing revenue. Aim to get customer shopping with your post-election and pre-Thanksgiving.

Be prepared for evolving shopping behavior. Recognize that younger consumers tend to wait longer to shop during the shortened holiday season while older generations plan ahead. Personalize your marketing efforts accordingly.  

Focus on the weeks leading up to Thanksgiving and immediately afterwards. As noted above, this was a key period in 2019.

Leverage postage offers. This will help with spend and add efficiency to your direct marketing efforts (we can help sort through this with you!).

Complement your Direct Mail touch points with Digital. Enhance conversion rates with increased frequency of messaging and the speed of digital. Perhaps go deeper in your models, both house and prospect, with digital-only communications that include countdown messaging. Offer free priority shipping with a purchase over a specific value to capture share from those last minutes shoppers, create gift guides and bundles for the holiday shopping challenged…increase the value of that basket or order size! 

As fellow marketers, we are your partners. Please reach out to discuss your direct marketing strategy for the next few months. 

As always, we’re wishing you all the success this holiday season.

Source: Epsilon

 

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Tom Says… Here’s What You Need to Know About the January 2024 Postage Increase

by Digital MarketingDirect MailMarketing StrategyMarketing TrendsNewsUSPS

It’s hard to believe that we’re already wrapping up the calendar year, and looking ahead to 2024! As the New Year rolls around, we thought it would be helpful to remind everyone about increases effective January 21, 2024.

In speaking with Tom, we were reminded about the Postal Service’s proposed postal rates that were filed back in October. Before you continue… we want to warn you, the increases are detailed! There are many! But, Tom and our team are here to work through them with you. Together we will optimize your direct mail investment with the end goal of growing your business.

Here’s a preview of what’s included in this update:

  • – Modest postage increases, 1.37% for letters, 5% – 6% for flats (catalogs) effective 1/21/2024
  • – Flats are seeing larger increases because they are not meeting their costs within the USPS
  • – Heavier flats (10 – 16 ounces) will see lower increases, just under 4% on average
  • – USPS is increasing discounts offered on 5-Digit scheme and SCF pallets to offset increases
  • – Similar increases with first class mail, 3% for a 1-ounce letter & postcards are less than 1%
  • – USPS promotions are a must for Direct Mailers to help keep costs in check
  • – All Direct Mailers should sign up for the 2024 Mail Volume Incentive Program
  • – Anticipate much larger increases in the range of 7% – 9.5% with the next increase expected in early July 2024

If you got what you need from our summary, great! If we didn’t scare you off, read on! 

What you need to know about the January 2024 postage increases

The USPS has put into place the following increases in their postal categories. Keep in mind that while these percentages are overall changes, specific sortation increases will be larger in some areas than others creating fluctuations from these announced increases.

USPS Published Rate Increases by Class

First Class Mail                                             1.969%

Marketing Mail                                              1.961%

Periodicals                                                     1.959%

Package Services                                          1.960%

Marketing Mail Increases

Letters                                                           1.333%

Flats (catalogs)                                             3.966%

Parcels                                                         20.029%

High Density/Saturation Letters                 1.073%

High Density/Saturation Flats                    2.144%

Carrier Route                                               3.963%

Every Door Direct (EDDM)                          2.525%

The January 2024 increase seems to be a consistent increase across all sortation levels within a given class of mail.  The reason why Flats & Carrier-Route Marketing Mail in increasing at a larger rate than other classes is because these are considered non-compensatory or under water products and are impacted with additional increases. For Flats, direct mailers can expect to see slightly higher increases at the high density, basic carrier route and 5-digit rates.

Letter Mail

Most letters mail optimally at a 5-Digit/SCF entry mail.  The 5D/SCF for-profit rate is increasing a modest 1.37% to $0.295/pc with non-profit rates increasing 1.47% to $0.138/pc. Drop Ship discounts offered to mailers who entering mail at the destination, are not changing from current rates. 

For-Profit Letter Rates

Flats – Four Ounces & Under

Basic Carrier Route mail will see the above average increases (4.792% at the SCF entry-level), and High Density/SCF entered mail will also see an above average increase of 6.04%. High Density rates did not increase with the last July 2023 USPS change. Good news – drop ship discounts are not changing from current rates. Non-profit rates, four ounces and under, will see lower increases than for-profit mail after experiencing higher percentages increases than for-profit mail in the last few years.

For-Profit Rates 4 Ounces & Under

To better understand the comparison of before and after rates, here are a few for-profit sortation scenarios calculated at different piece weights:

Heavier catalogs will see lower percentage increases that books closer to four ounces.

Flats Postal Discounts

The USPS is again offering higher discounts for Mailers creating SCF and Five-Digit pallets

First Class Mail

  • – A stamped one-ounce letter has increased to $0.68/pc from $0.66/pc (3.03% increase)
  • – First class flats have increased 1.44%
  • – First class postcards have increased to $0.357/pc from $0.355/pc (<1% increase)

USPS Promotions

At Media Horizons, we believe strongly in strategically using the USPS discount promotions to your advantage. As your partners, we can help you identify the promotions and determine how best to use them to ultimately achieve your goals. Here’s the latest:

  • – Tactile, Sensory & Interactive – 5% USPS incentive for Marketing Mail & First-Class Mail – 2/1/2024 – 7/31/2024
  • – Personalized Color Transpromo – 3% or 4% USPS incentive for First Class Mail – February 1st – July 31st
  • – Emerging & Advanced Technology – 3% to 4% USPS incentive for Marketing Mail & First-Class Mail

          NEW – Direct Mailer can pick the 6-month window they would like to use this promotion

  • – Reply Mail IMbA – 3% USPS incentive for First Class Mail – July 1st – December 31st
  • – Informed Delivery – 4% USPS incentive for Marketing Mail & First-Class – August 1st – December 31st

The mail preparer also receives a 0.5% incentive from the USPS

  • – Retargeting Mail – 5% USPS incentive for First-Class Mail – September 1st – November 30th

We’d love to have a conversation about your direct mail campaign, but if you want to quickly scan through the latest details, here they are! Most important takeaways: Beginning in 2025, the mobile shopping incentive will no longer be available and the gloss paper qualification will no longer be available.

Dates to mark on your calendar!

December 2024 – Mobile Shipping Advanced Technology Promotion

Did you know that there are no USPS promotions going to be offered for this coming January? On December 15th, customers should sign up for the Emerging & Advanced Technology Promotion, which can be taken during any consecutive six-month period next year. Included in this promotion is the Mobile Shopping application. By placing a mobile optimized QR code within the mail piece, the USPS is offering a 3% postage incentive during a month that does not have incentives available. The Mobile Shopping incentive offers a no-cost solution to save postage dollars. More information on this promotion is available here.

February 2024 – July 2024 – Coated Paper for the Tactile Promotion

We recommend that customers mailing on coated paper sign up for the Tactile, Sensory & Interactive promotion. The USPS offers a 5% postage incentive for simply using gloss coated paper. All opportunities will be approved in advance by the USPS through their Mailing Promotions Portal (MPP). Many customers are already using gloss coated paper, so this incentive offers a potential no cost solution. Who doesn’t love a no cost solution?! If gloss coated paper is not being used or other interactive marketing elements are desired, the USPS is offering the incentive for the use of specialty inks, sensory treatments, or interactive elements. Pro tip: registration for this promotion also begins December 15th. More information on this promotion is available here.

August 2024 – December 2024 – Informed Delivery Promotion

Filling out the year, another no cost solution that offers a 4% postage incentive is Informed Delivery. Customers can sign up for this promotion starting June 15th. There is a little preparation work required to set up each campaign, but a 4% incentive is nice reward for a little amount of additional work that is required. More information on this promotion is available here.

Overall 2024 USPS Mail Volume Incentive

Lastly, we recommend that everyone sign up for the 2024 USPS Volume Incentive Program. The USPS will be offering a volume growth incentive rewarding customers for 2024 growth in pieces mailed compared with their 2023 volume baseline. The minimum baseline volume will be set at the Mail Owners actual volume or a minimum one million pieces and they are offering up to a 30% rebate on the growth to be used on future mailings after exceeding their volume threshold.

Another date to mark on your calendar! Registration will begin in November 2023, including a verification and approval process by the Mail Owner to the USPS agreeing on the designated baseline volume. The baseline period is marketing mail and first-class pieces mailed from October 2022 through September 2023. Marketing mail and first-class mail volume will be measured separately from one another and will not be combined. 

Postage rebates will be applied towards future mailing through December 2025 with potential credits becoming available in July 2024, October 2024 or February 2025.

These are the newer promotions that stuck out to us. There are others available, such as reply mail, retargeting, etc., which are just as important! 

Whew! You made it through. Thanks for sticking with us. As you know, there are so many details out there when it comes to the USPS. Our goal is to keep you informed while drilling down to the most important information that can benefit your business. As always, we’re here to chat and look forward to solving postage challenges now and in 2024! 

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Tom Says… Here’s What You Need to Know About the July USPS Increase

by Direct MailMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Thanks for bearing with us this month with this two-part post! We thought it would be helpful to refresh everyone about how postage rates are charged. Now, we can get to the super important details: this month’s USPS rate increase.

Effective July 9, 2023, the USPS has put into place the following increases in their postal categories. Keep in mind that while these percentages are overall changes, specific sortation increases will be larger in some areas than others creating fluctuations from these announced increases.

– First Class mail has increased on average of 5.38%

– Flats (catalog) mail is increasing 7.38%

– High Density / Saturation Flats is increasing 3.07%

– Carrier-Route mail is increasing 7.39%

– Letters is increasing 5.20%

– High Density / Saturation Letters is increasing 5.06%

– Periodicals (Magazines) is increasing 8.12%

– EDDM (Every Door Direct Mail) is increasing 4.76%

Letter Mail

Most letters mail optimally at a 5-Digit/SCF entry mail. The 5D/SCF for-profit rate has increased 5.82% to $0.291/pc. With non-profit rates increasing 6.25% to $.136/pc. Saturation & high-density mail offers lower rate possibilities, but they are very difficult to achieve in national demographic programs.  Commingling offers cooperative solutions to help minimize postage costs and should always be considered for pieces that do not qualify for 5-Digit/SCF entered rates.

Drop Ship SCF discounts for letters is increasing to $0.035/pc vs $0.030/pc & NDC discounts are now $0.027/pc vs $0.023/pc. Non-profit rates are increasing at a higher percentage than for-profit rates.

NEW: Effective with the July changes, the USPS is now offering a SCF entry Discount for 5-Digit & 3-Digit sorted mail. A similar discount was introduced for Flat Mail in July 2022, and it will offer some postage relieve for SCF pallets. Each qualified piece can earn $0.003/pc discount.

Flats – Four Ounces & Under

Basic Carrier Route mail will see average increases (6.82% at the SCF entry level), and High Density Plus and Saturation entry mail will see below average increases. High Density/SCF mail will see no increase after seeing much larger than average increases in the last several postal changes. Origin entered mail will see larger increases. 

As with letter mail, drop ship discounts are growing, $0.091/pc for SCF entry and $0.071/pc, over all sortation levels.

Non-profit rates four ounces and under will also see larger increases that for-profit mail. We have seen this common occurrence with non-profit rates happen over the past several postal changes as they are trying to narrow the gap difference.

The USPS is also increasing their 5-Digit Scheme Pallet and SCF Pallet Discounts to help minimize increases. The discounts are the same regardless of for-profit or non-profit qualified mail.

Flats – Over Four Ounces

There are significant changes taking place with flats mail over four ounces. Previously, postage for pieces in this rate category received a piece postage charge PLUS a pound postage charge applied on each fraction of a pound mailed. The new rates continue to apply a piece rate, but the pound rate will only be applied for each fraction of a pound over 4 ounces (0.25#). Comparing rates from January 2023 to July 2023 will look odd (see chart below) because the new rate structure is pushing more postage in the piece portion and less in the pound portion, it is comparing apples to oranges. Drop ship discounts for pieces over 4 ounces used to be discounted from the pound portion of postage, but it will now be discounted from the piece portion of postage. You can see the differences in the chart below.

To better understand the comparison of before and after rates, here are a few for-profit sortation scenarios calculated at different piece weights:

There are three scenarios above, High Density, Basic Carrier Route & 5-Digit flat postage. As the piece weight grows, the impact of the increase also grows at a substantial rate.  Heavier pieces are seeing much higher than average postal increases.

The same Pallet Discounts as outlined for Flats four ounces and under apply to pieces over four ounces giving some relief.

First Class Mail

– A stamped 1-ounce letter has increased to $0.66/pc from $0.63/pc (4.76% increase)

– First class flats have increased 7.15%

– First class postcards have increased to $0.355/pc from $0.352/pc (<1% increase)

USPS Promotions

As a general best practice, we advocate that all direct mail customers take advantage of the discount promotions that the USPS offers. The USPS has made the approval process much easier and more responsive with the addition of the Mailing Promotions Portal (MPP) on the USPS Gateway. The USPS is managing all inquiries and approvals through the portal, so it is imperative to sign up for the service.

2024 USPS Promotions

– Tactile, Sensory & Interactive – 5% USPS incentive for Marketing Mail & First-Class Mail – 2/1/2024 – 7/31/2024

– Personalized Color Transpromo – 3% or 4% USPS incentive for First Class Mail – February 1st – July 31st

– Emerging & Advanced Technology – 3% to 4% USPS incentive for Marketing Mail & First-Class Mail

*NEW – Direct Mailer can pick the 6-month window they would like to use this promotion

– Reply Mail IMbA – 3% USPS incentive for First Class Mail – July 1st – December 31st

– Informed Delivery – 4% USPS incentive for Marketing Mail & First-Class Mail – August 1st – December 31st. The mail preparer also receives a 0.5% incentive from the USPS

– Retargeting Mail – 5% USPS incentive for First-Class Mail – September 1st – November 30th

Not only can we help you take advantage of these USPS promotions, but together we can add strategy and innovation to your print marketing efforts. Additionally, with our network of printers & suppliers, we’re bound to solve challenges together that you may not have known you even had! We look forward to helping you navigate these updates and most importantly, use them strategically to ultimately grow your brand. 

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Tom Says… Here’s How Postage Rates Are Charged

by Direct MailMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

We know you’ve been waiting for Tom’s latest update! So much has happened with the USPS in the last 1+ years, but we’re here to help you navigate this unchartered territory. Before we get into the actual updates that occurred this month, Tom wanted to be sure you understand the structure on how postage rates are charged.

A basic knowledge of sortation and destination entry will help with an understanding of the current rate structure.

Postal Sortation Qualification Requirements

The USPS offers discounted pricing for brands to sort the mail rather than having the USPS manage the sortation process. The higher the sortation level achieved by the brand, the lower the overall postage costs that are charged.  Achieving sortation levels to minimize postage costs are totally reliant upon where pieces are going and what volumes are going to those destinations. Common sortation qualifications include:

From top to bottom, the deeper sortation requires less USPS processing results in lower postal rates to the customer. For mailers to achieve high density & saturation postal rates, there either must be a significant volume of mail, or it must be a very regional mailing. 

Letter mail is sorted to the 5-Digit scheme rather than to the Basic Carrier Route level. The reason for this is because the USPS automation equipment will sort mail at the 5-Digit level, and they do not want mail in carrier-route bundles. The higher postage costs for Carrier-Route Letters discourage Carrier Route mail. There is an advantage for letter mail to sort to the HD, HD Plus or Saturation levels. However, it is very difficult to achieve without significant volumes. Sortation to more efficient levels is why cooperative mailing programs such as co-mail (flats & periodicals) or commingle (letters) exist and should be part of every mailing program.

Destination Entry

The USPS also offers discounts from the base rates if the mailer coordinates dropping the mail into the USPS at the destination rather than dropping at the mailer’s location. This is called destination or drop ship entry.  For this to make sense, the mailer will determine where pieces are mailing to and calculating if the USPS postal discounts exceed the additional freight costs, that the customers will be responsible for paying, in transporting and dropping to USPS facilities at the destination.

From top to bottom entry levels, origin mail is simple, but offers no discounts because the USPS must take responsibility to ship pieces to their destination while progressively larger discounts are offered for NDC, CSF & DDU entry.  DDU entry is difficult unless there is significant mail going into a specific (regional) area.  Most larger mailers will enter mail at the SCF level.

This is just a quick snapshot of how postage rates are charged. However, we felt it was important to reiterate some of these details. We all read headlines about “rate increases” and industry-wide postage changes, so we thought it would be helpful to set the stage. Stay tuned for part two highlighting the actual increases from the USPS this month!

Next up: The July 2023 USPS Increase – what it is and how you can combat it.

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Tom Says… Here’s What You Need to Know About the Latest USPS News

by DataDigital MarketingDirect MailMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Recently we sat down with our colleague, Tom VanWestrienen, also known as our resident USPS expert. We thought it would be helpful to share that latest USPS news with you – and what this means for your direct marketing efforts.

On January 22, postal rates for all classes of mail were increased. Average increases by class were +4.20% (First Class), +6.25% (Marketing Mail Flats), +3.29% (Marketing Mail Letters), +4.20% (Periodicals), and +20.49% (Parcels).

While we know this news is less than ideal, we’re here to help you optimize your direct marketing strategies in the most efficient way possible. In fact, we are excited to share several incentives that would help offset some of your clients’ new costs. Check out our recommendations here: 

  • The USPS is offering a 5% postage discount for their Tactile, Sensory and Interactive promotion from February 1 – July 31, 2023 on First Class and Marketing Mail products. The USPS has approved this promotion for mailing direct mail on coated paper stocks (coated gloss, matte, soft gloss, SCA, etc). 

Our recommendation: All direct mailers should consider applying for the promotion to mitigate the recent January 2023 postal increases.

  • Adding to the Tactile, Sensory and Interactive promotion to maximize postal savings, direct mail marketers should plan on seeking the 2023 Informed Delivery promotion running from August 1 – December 31, 2023. As with 2022, the USPS is offering a 4% postage discount for using Informed Delivery. This provides direct mailers with an effective USPS promotion strategy spanning all of 2023.

Our recommendation: With USPS increases happening twice a year for the foreseeable future, it is critical for customers to come up with an effective strategy that provides savings opportunities throughout the year. Many direct mailers embraced the Informed Delivery promotion in 2022 and this promotion should be mandatory in 2023.

  • The USPS is again offering the Emerging Technology from May 1 – November 30, 2023 (3% or 4% incentive). If customers opt for this promotion, the USPS is offering a new promotion called Retargeting, which provides a 5% incentive from September 1 – November 30, 2023 for Direct Mailers sending out First Class postcards to recent visitors to their website or mobile apps that did not convert.

Our recommendation: There has never been a better time to explore retargeting as an acquisition tactic. If you are not currently retargeting your website visitors, get in touch with us to implement a solution. 

It is important to note that registration for these promotions needs to take place in the Business Customer Gateway (BCG).  Many of these promotions require advanced USPS approval to ensure the mail pieces meet the requirements of the promotions. Located within the BCG is a Mailing Promotions Portal (MPP), brands can seek approval for individual mail pieces. Refer to the guide here.

Insider Tip: The USPS encourages all approval requested to be entered through the MPP. All samples being sent for USPS approval must be shipped through USPS products, UPS and Federal Express packages will not be accepted.

Unfortunately, Tom says to expect another postal increase in early July. At this point, the impact of this increase is unknown, but changes in the 3-6% range should be expected.

Considering this news (and anticipating more changes!), there’s never been a better time to explore relevant digital channels to help maximize your offline investment. We can help support with various audits to provide valuable insights and recommendations. Diversifying your media mix will propel your business forward.

As always, we asked Tom to describe today’s print marketing environment in one word. For the beginning of Q1 2023, he said “defensive.” Specifically, Tom shared, “It feels like one on one basketball right now. We’re all trying to react effectively while not knowing what challenges the USPS is going to drop on mailers’ laps these days.” Let the teamwork continue so we’re all shooting nothing but net with our marketing campaigns!  

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2022: A Year in Review…

by DataDigital MarketingMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Here’s what we think: 2022 was anything but 2020-Too. If you caught our post last December, we were cautiously optimistic about this year. Bricks-and-mortar continued to hold their own, marketers weathered the storm of privacy concerns and iOS updates and navigated more media channels than ever before.

When we look back at 2022, there are some key trends that come to mind… and get us excited for 2023! Let’s review:

  • Paper Is on Its Way Back!

In July, we reported that paper supply remained tight, and prices were continuing to climb due to steady demand, reduced capacity, and high input costs. Today, demand is softening somewhat, prices are holding steady, and paper is generally becoming more available. Whereas most paper mills have been on allocation or even moratorium, these supply restrictions are easing and the global paper shortage that we have been experiencing is abating. 

That said, so much capacity has come out of the market in the past decade that pricing is expected to remain at elevated levels, especially if demand stays steady in the first half of 2023. Graphic paper supply will continue to decrease in the coming years as mills continue to diversify their product mix. Several mill conversion announcements have already been made that will significantly impact supply going forward. Aligning with strategic suppliers will be paramount for end-user customers.

As direct marketers, we believe in the power of offline media. In fact, marketers have combatted paper challenges with increased use of direct mail, clever interplay between offline and online efforts, innovation with page count and circulation, and more. We’re excited to see where offline media goes in 2023.

  • Shifting Consumer Behavior

While we haven’t been surprised by many trends that have soared in popularity in 2022 – the power of personalization, volume of online shopping and an interest in sustainability – there is inarguably power in consumer behavior. In many cases, changed interests and values have resulted in brands shifting their retail strategy and product innovation.

However, what has also resulted in brands’ shifting strategies? Inflation. “Inflation has driven up the cost of all goods by 8.2% between September 2021- September 2022,” according to the Bureau of Labor Statistics (source: Nerd Wallet). It’s important to note that inflation has affected some categories more than others, such as food versus clothing prices. Will there be any relief in 2023? Will supply chain issues resurface? We’ll all have to stay tuned.

  • Data Is Everything

At Media Horizons, our “secret” is placing emphasis on intensive data and analytics to grow our clients’ businesses. Today, online to offline attribution is a major pain point for many companies. That said, without a quality attribution model, upper funnel media has been intensely impacted. Check out more reasons why data (and attribution) are everything!

  • The Future of Paid Social

In 2022, Facebook and Instagram targeting saw a greater impact from Apple’s privacy restrictions that went into place in 2021. Advertisers have had to experiment with a variety of targeting tactics, including broader targeting and more tightly targeted ad copy.  

Audience targeting challenges will continue into 2023, but Facebook and Instagram’s automated targeting has been yielding success in the absence of audience targets that have been removed.

We recommend that advertisers test newer Paid Social platforms like TikTok and BeReal. to see what kind of traction they can get, and diversify their ad formats, such as expanding to Instagram Reels.

  • Postage Updates on the Horizon

In 2021, the industry saw two significant postal changes resulting in double-digit increases for catalogs (Marketing Mail flats) and near double-digit increases for Direct Mail (Marketing Mail letters). In case you didn’t catch the exact percentages, get familiar with them here. The USPS has recently announced their next increase, which will take place in January.

There’s never been a better time to be strategic about your direct mail strategy. Consider changing to a different format – encourage creative thinking with your vendors – and add innovation to your strategy accordingly. Stay tuned for our next “Tom Says…” in which we’ll share everything that you need to know about the USPS updates.

When we look back at trends from this year and ahead to 2023, there is one key theme that comes to mind: omnichannel. The value of an omnichannel strategy is unmatched. If your media mix does not include both online and offline channels (that are working together!), your brand is not as strong as it could be. Be the change and future-proof your business. Connect with us in 2023 to propel your business forward.

 

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Tom Says… Here’s What You Need to Know About the USPS Today Part II

by Direct MailMarketing StrategyNewsUSPS

We’re excited to share Part II of our conversation with Tom VanWestrienen of Eliezer Consulting. In follow up to last week’s conversation, we wanted Tom’s perspective on how to handle these USPS updates. For example, are there any opportunities that these changes could present? How can brands adjust to these changes in a positive way? Here’s Tom’s take:

Q: Since it will affect the above formats, how can brands prepare / update their DM strategies accordingly?

Consider changing to a different format. Updating the physical make-up of a piece can move it to another, less expensive rate class. At this juncture, creative thinking while partnering with your vendors on strategy would provide the best overall outcome (we’re talking response rate and cost-efficiency!).

Q: What are some other opportunities that these increases present?

Are you fully utilizing opportunities offered by your printer? Processes such as co-mail or co-bind can reduce postage by improving sortation levels and increasing discounts. Additionally, the USPS offers several promotional discounts which can reduce postage by 2-4%/piece (See 2022 promotional calendar here). The USPS is also continuing the promotional discounts in 2023 with discounts up to 5%.

Q: What are some tips for preparing for the all-important holiday season?

Make sure that every customer is using cooperative mailing programs to minimize postage costs. Co-mailing for flats & periodicals and commingling for letters are cooperative mailing programs that should be used whenever possible. Also, the USPS offers mailing incentives that are too good to pass up. Today, the USPS offers a 4% immediate postal reduction if a direct mailer is using their Informed Delivery program. This program started August 1st and runs through December 31st. The USPS offers other incentives throughout the year and for minimal effort, these savings really add up. We can help you utilize and manage this!

Q: Do you think that we expect any leniency / decreases in early 2023?

Unfortunately, we do not anticipate postage reductions in the future. Postmaster General Louis DeJoy is operating the USPS as a business, and as outlined in the Delivering for America plan, he is focused on achieving financial stability and service excellence at the USPS. 

Q: Tom, can you describe today’s catalog and direct mail market in one word?

Challenging – but there are solutions that help navigate increased postal costs! Let’s have a conversation. Don’t hesitate to reach out!

We hope you enjoyed the first of our quarterly USPS updates from Tom! Each quarter, he’s going to describe the catalog and direct mail market in one word… we’ll see where we net out around this time next year! We’re excited about what the future holds for offline marketing and look forward to partnering with you. For now, that’s what Tom has to say!

 

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Tom Says… Here’s What You Need to Know About the USPS Today

by Direct MailMarketing StrategyNewsUSPS

Would you have ever thought the USPS would be such a hot topic? We didn’t! However, the last few years have proven to be challenging when it comes to postal rate increases and how they affect brands’ catalog and direct mail strategies. That said, with challenge, often comes opportunity and reward.

We sat down with Tom VanWestrienen of Eliezer Consulting to get his take on the latest hikes. Not only are the changes daunting, but they can be difficult to understand. Tom is here to tackle some of the tough questions, and hopefully help future-proof your offline strategy. He’s seen it all in his 35 years working with catalogs and direct mail.

Q: What are the latest USPS rate increases for catalogs and direct mail?

The industry saw two significant postal changes in 2021 resulting in double-digit increases for catalogs (Marketing Mail flats) and near double-digit increases for Direct Mail (Marketing Mail letters). On July 10, 2022, the USPS again increased postal rates on average by 8.5% for flats and 6.5% for letters. While these are averages across each class of mail, one really needs to understand the changes on each postal sortation level to fully comprehend how the postage increases impact a customer’s mailing.

A few examples of this are in the August 2021 increase: Larger catalog mailers who consistently achieve high density and saturation sortation levels saw increases in these categories in the range of 11% – 14%, but the USPS impact the Marketing Mail flats class was published at 8.5%. On the latest July 2022 increase, non-profit flats saw significant increases in the range of 11% – 18%. Also, heavier catalogs approaching 16 ounces saw much smaller increases in the range of 2% – 4% with the latest postal increase.

The USPS has also recently announced their next increase, which will take place on January 22, 2023.  Marketing Mail letters can expect an increase of 3.3% while Marketing Mail flats should expect an increase around 6.3%, but just like the 2021 increase, the USPS is hitting high density and basic carrier-route sortation levels more significantly. This results in surges much higher than the announced flat increases for direct mailers who regularly achieve these sortation levels.

Q: Why are there increases for catalogs and direct mail?

To achieve financial sustainability, the USPS is now allowed to pass along two increases annually, one in late January and the other in early July. 

The USPS now determines postal increases based on four factors:

  • – Consumer Price Index (CPI) impact
  • – Address density impact
  • – Retirement funding for its workers
  • – Underwater products in compensatory classes

Current underwater products include Marketing Mail Flats, Marketing Mail Carrier-Route Flats & First Class Flats, which is why their rates are being increased.

Each increase will include some or all the components depending on specific rules around when or how they can be applied to postal increases. We expect that in the next couple of years, the USPS will annually pass along one large increase and one lower increase as they work to become more financially sustainable. Past increases based solely on a CPI factor are no longer in place. Underwater classes will see at least a 2% surcharge on postage to normalize pricing to cover costs.

Q: How will this affect print production and circulation planning?

While costs continue to escalate, direct mailers have been hit especially hard these past few years. One would think that there will be circulation and/or page reductions to help minimize these escalations. We would also expect direct mailers to change the formats of their programs. While overall catalog costs have elevated significantly in the last three years, letter mailing may still be an attractive alternative for direct mailers. “Slim Jim” and letter sized all-inline formats should become more popular because the cost to mail these types of products are much more affordable.

 

Stay tuned for Part II of our conversation next week! In our follow-up conversation with Tom, we discuss how brands can prepare for the all-important holiday season and update their DM strategies for 2023 based on the upcoming USPS changes. Be sure to check in next week!

 

The Truth About Your Campaign Metrics: Facebook Announces that Apple Data Is Skewing Conversions

by Direct MailMarketing StrategyMarketing TrendsNewsUSPS

As digital adoption continues to soar post-pandemic, it is evident just how interconnected we really are. This week, Facebook began to quantify the negative aspects of this interconnectivity.

On Wednesday, September 22nd, Facebook announced that it underreported ad performance due to Apple’s iPhone privacy update for its iOS operating system. Specifically, Facebook estimated that it is currently underreporting web conversions on Apple’s iOS by approximately 15% and that this could affect advertisers of various sizes in many ways.

Why This Happened

Recently, Apple made a pivotal update for its users; now iPhone and iPad users will need to opt in to being tracked when they launch an app for the first time. It is now evident how much this new parameter affected advertisers’ campaigns.

What This Means For You

Facebook Vice President of Product Marketing shared in a blog post: “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers.” Therefore, the results that you are seeing are likely lower than how your campaign is actually performing. 

How We Can Help

Partnership is at our core. We understand that this is not an ideal situation, but because of our strong industry ties and media relationships, we will get through this together. In fact, our digital and data & analytics teams are already working on solutions and adjustments considering this news, which includes:

  1. Working with our Facebook reps to further understand the percentage of users/conversions being impacted across each of our individual clients, and then building models that factor in the potential data loss
  2. Leveraging our clients’ website analytics tools (Google Analytics, Adobe Analytics, etc.) to measure key engagement and conversion data points to supplement data coming directly from Facebook.
  3. Researching additional technology solutions to layer on top of Facebook and website analytics platforms to help fill any gaps in the data (however, we are in the early days of these new data privacy issues, and this is more of a longer-term play).

As marketers, we always aim to keep our tech stack fresh, current, and innovative. We are looking forward to solving the challenge Facebook and Apple have presented to us. We are especially looking forward to delivering to you the positive results we know your campaign is driving towards. Stay tuned!

Sources include CNBC, Facebook, and AdAge.