Magazine article Editor & Publisher

Sweetheart Deal for Direct Mailers?

Magazine article Editor & Publisher

Sweetheart Deal for Direct Mailers?

Article excerpt

Although new postal rates may not take effect until next May, the U.S. Postal Service's proposed increases have been lauded in some quarters for being modest -- and criticized in others for imposing higher costs on newspapers while offering discounts to direct mailers.

The postal rate case -- 100,000 pages, according to a Postal Service spokesman -- was filed July 10 with the independent Postal Rate Commission. The proposal calls for an increase of 4.5% across the board for domestic service, including an increase of about 3.5% in the in-county mail rate, the category most used by newspapers.

It calls for a 1 [cts.] increase in First Class mail, and a 2 [cts.] decrease in prepaid return mail, from 32 [cts.] to 30 [cts.].

The proposal received a muted response from the National Newspaper Association, which represents community newspapers.

In the last rate case, the Postal Service called for a 34% jump in the in-county rate; the NNA fought it, and ultimately a 1.8% increase was approved. At this point, the NNA will not take a position on the proposal until its analysis of the rate case is completed, said spokesman David Mendes.

The Newspaper Association of America, which represents daily newspapers, however, did a preliminary analysis of the new rates, based on material released by the Postal Service prior to the formal filing, and concluded direct mailers will see a significant discount.

The NAA analysis showed an increase of 3.3% to 3.5% in the rate for local advertising mail weighing up to 3 ounces, but a decrease over current rates for mail weighing more than 3 ounces; a 16-ounce item would see an 18% discount.

"It is a sweetheart deal for direct-mail advertisers," said Ronald Weathersby, an NAA spokesman.

The Postal Service disagrees.

Roy Betts, an agency spokesman, said, "The sense that we have is that it's a modest rate increase, and our position is that it's fair to small business, advertisers [and] users of the mail."

Betts said the cost of fuel and labor have gone up 10.5% since the last rate increase. However, the Postal Service was able to proffer a smaller increase because it has kept its rates stable over the past three years and has been fiscally responsible, he said.

Direct marketers saw it the same way Gene A. Del Polito, president of the Advertising Mail Marketing Association, said that the overall proposal is favorable.

"On balance, we say of the rate filing, `Hey, this is pretty good,'" Del Polito said.

Anyone may find fault with parts of the proposal when examining the details, he said. …

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