POSTAL INCREASES — PUBLISHERS TAKING A HIKE

IN A time when cost savings and technological improvements have been encouraging publishers of printed products to turn their focus toward the Web, add one more reason to the mix: postal hikes. With one hike earlier this year and the latest proposed hike of 11.4 percent for periodicals and 8.5 percent for standard mail, circulation directors are rethinking their strategies and bracing for financial decisions that could be made by higher-ups.

Evelyn Adenau, circulation director for 115,000-circulation San Francisco, already budgeted for the first raise in U.S. Postal Service (USPS) rates, but admits that she, along with many others, did not see this second proposal coming.

“The post office is always raising the rates,” she says, “so you plug in a certain percentage for the next year, assuming there will be a rate change. This second one is surprising—I think it could ultimately cost them in lost shipping more than they gain in the extra income.”

Driving Web Traffic

Eric Rutter, American Business Media circulation chair and vice president, controlled circulation for Reed Business Information, also expects direct mail efforts to further decrease.

“We had a lot of incentive to go with the Internet beforehand,” he says. “This just makes traditional mail seem like that much more a thing of the past.”

Patrick Hainault, consumer marketing director for Inc. and Fast Company, sees this not just affecting marketing, but the whole publication. “You have a choice to push more online digital editions, and I think you’ll see more small publishers going that route,” he says. “Every time you do the economics, online wins. The post office has done nothing more than just drive that point home.”

Adenau believes those who don’t decrease their print presence may decrease paper quality and trim size. “We actually increased to a 10x12˝ paper size recently and also went with heavier paper,” she says. “We would have liked to have foreseen the postal situation when making that decision. One possibility is following a magazine like Yankee, which now has two out of its 12 issues only available online.”

Hainault also sees the fulfillment process joining the online fray.

“We’ll have to push for more cover wraps and using the magazine itself to piggyback on the postage being paid,” he says. There’s no question that the circulation budget strategy also has to change. Hainault says he’ll be adding 3 percent to 5 percent to his forecast budget of last year.

Adenau will also be planning for a boost. “I’ll have no choice but to plug in a few more percentage points when it comes to postal costs next year,” she says. “But I’m also going to be ready for other possibilities. One would be manipulating the postal license. I’d ask myself whether the paper and cover stock can be downgraded without sending away readership. Also, you have to look at reducing copies on the comp list and for the audience that doesn’t need to have the [printed] magazine. You need to look for alternative ways to keep advertisers and also check out verified distribution, looking at the public place alternative.”

Adenau also points out that there are efficiency improvements that have been available that circulation directors don’t fully implement.

“We can do a better job of mining through carrier routes—going beyond ZIP-code plus four and doing the work to get to the true carrier route level. Drop-shipping instead of multiple entry points could also save permit fees.”

Hainault says teaming up with other publishers through technology to co-mail will have deeper penetration into certain postal areas by getting ZIP code discounts.

“If we bundle together sequentially on what’s going to the same areas, the post office runs more efficiently than disparate mailings,” he says.

Hainault also feels that more information has to be out there when it comes to the steps publications are taking to save the USPS money and how the postal system wants to work with publishers.

“I see a lack of communication between the two, when they should be partnering together,” he says. “Many publishers seem to feel like not trying that hard in their circulation practices because they feel the hikes are coming no matter what.”

One ray of postal hope is the possibility of the “forever stamp,” a locked-in postage rate that could be purchased now (at 42 cents if the Postal Service proposal is approved) and used forever, no matter the rates of the future. But with this still in the concept stage, most circulation directors would rather budget for probabilities than what-ifs. Regardless, Adenau says the second postal hike proposal has taught her to prepare for anything with the USPS, and she’s even learned to see its side of things.

“It’s similar to the gasoline hikes,” she says. “The prices that we’re upset about are the same ones with which Europeans would be thrilled. You can see why the post office went this way because they’re quasi-privatized and have been losing money for years. I guess they feel it’s our turn.” PI

About the Author
Eric Butterman is a New York-based writer and creator of the seminar “Better Business Writing: From E-mails to Everything That Makes You Money.”