postal alternatives and rates

Postal Alternatives and Rates

An NTMC Webinar9/15/10

Postal Alternatives and Rates

Keith Gilpin, Vice President Advertising Distribution & Operations, Orange County RegisterWelcome to our first NTMC webinar!All panelists audible, attendees muted.Attendees encouraged to submit typed questions.We will have Q&A for each panelist, but no more than ten minutes total for each segment. Final Q&A following at end will be available for additional questions.Assisting today: Philip Brown, NTMC Executive Director and Program Organizer will manage slides, the clock and field questions from attendees.

Your moderator:

Jim Hart, President, Integrated Advertising SolutionsDuff Heyl, TMC Sales and Operations Manager, Arizona RepublicErnie Chenault, TMC Manager, The Virginian-Pilot Perry Corsetti, Director of Customer Relations, Philadelphia InquirerPaul Boyle, Senior Vice President / Public Policy, Newspaper Association of America Your panelists:

Jim Hart, President, Integrated Advertising Solutions Impact of postal rate increases on newspaper TMC programs

A 6-year trend2011 USPS Increase

Standard Flats up to 3.3oz.

Standard Flats up to 3.3oz.Proposed 2011 Increase

Standard Flats Piece/Pound

HD DDU 2005-2011

CPI 2005-2010 +12.6%GDP 2005-2010 +17.7%

Where you really need to be ..

SAT DDU 2005-2011

SAT DDU 2005-2011

SAT DDU 2005-2011

Compound Problem?

Newspaper TMCs Our competition

Jim [email protected]

Duff Heyl, TMC Sales and Operations Manager, Arizona RepublicArizona Republic 100% mail delivery

Product overview:Branded as Buyers Edge8-page tab, 100% advertising Zoned into 15 geographical zones Not bagged

Arizona Republic 100% mail delivery

Product image:

Arizona Republic - 100% mail delivery

What is your current mail footprint mail? 1.3 million packages mailed each week to non subscribers via USPS MailWhat do you see as benefits for staying in the mail?Proven Distribution ModelProven SuccessConsumers ExpectationsClients NeedsLocal Competitive Landscape

Arizona Republic 100% mail delivery

What are your factors for staying in the mail?Continued SuccessEstablished MarketplaceConsumers & Clients ExpectationsTargeting Strong Brand/Distribution ModelHigh Density vs. Saturation LevelsHigher Levels of SaturationFuture Incentive ProgramsControlling Non-Postal CostsVendors/PrintersLeveraging Products to Offset Postage IncreaseFootprint ChangesArizona Republic 100% mail delivery

What concerns do you have for the future of USPS Mail Delivery? Future of rate increasesSustaining Future Rate Increases on our Clients Controlling costs/margins What will Advertisers/Consumers want in the future?Will they prefer Mail vs. Alternate Delivery vs. what? Ever changing competitive landscapeWhat will future competition look like?

Arizona Republic 100% mail delivery

Have actions or communication from the post office influenced your decision to stay in the mail? No one key past action/communication but future actions are key. Future Rate Increases. The incentive plans (Current & Proposed).Flat Sequencing System. Arizona Republic 100% mail delivery

Are you considering a rate increase next year as the postal rates go up? Considering a rate increase but not impose across the board. Strategically look at accounts/products to help offset any postage rate increase. Ultimately will depend on the PRCs decision in October. How often are you evaluating staying in mail? Constantly looking at our overall costs & margins. Arizona Republic 100% mail delivery

Arizona Republic 100% mail delivery

Duff [email protected] 602-444-4586 Ernie Chenault, TMC Manager, The Virginian-Pilot

The Virginian-Pilot Hybrid mail and alternate delivery

Product overview: Hampton Roads Savings Weekly Broadsheet product, printed on regular newsprintStrong grocery contentInside advertising is b/w classifieds. No editorial content. It can run a maximum of 10 pages, which happened a few times a few years ago before recruitment dropped off.Mailed copies are delivered to the Post Office flat, while the alternate delivery copies are bagged.

The Virginian-Pilot Hybrid mail and alternate delivery

Product image:

The Virginian-Pilot Hybrid mail and alternate delivery

How many pieces did you convert to carrier delivery? Approx 105,000What percentage was that of your total delivery? Approx 55%When did you do it? Two stages: the majority in March, 2010an additional 15,000 in May, 2010.

The Virginian-Pilot Hybrid mail and alternate delivery

What prompted you to make this decision: Expense reductionSome issues with timely postal delivery.What has the customer commentary been like: Some smaller customers dropped out citing declining returns.What has the consumer commentary been like: Many complaints with driveway delivery the first month;Complaints have declined over time. The Virginian-Pilot Hybrid mail and alternate delivery

How do you handle mixed delivery system complaints? Because we dont split zip codes between mail and alternate delivery, we can quickly pinpoint the distribution method for each household. Complaints from homes receiving the TMC via the USPS are handled internally.Complaints from alternate delivery households are directed to circulation who forward them to alternate delivery vendor. We provide advertisers information on which geographies are mailed and which are alternate delivery.

The Virginian-Pilot Hybrid mail and alternate delivery

What benefits have you seen from your mixed delivery system: Significant expense reduction offsetting higher postal rates.More consistency on delivery dates.What negatives have you seen from your mixed delivery system: Homeowners prefer to get unsolicited packages through the mail. Handling consumer complaints are often time consuming and frustrating.

The Virginian-Pilot Hybrid mail and alternate delivery

Have you altered your pricing strategy as a result of the changes? No, we had an internal alternate delivery system several years ago and our pricing has historically been low from a CPM basis. We did raise rates when we moved to mail a few years ago, but not significantly enough where we felt our prices were too high for alternate delivery.

The Virginian-Pilot Hybrid mail and alternate delivery

What will make you consider moving more pieces from the mail to alternate delivery or from alternate delivery back to the mail: We would consider returning to the mail if the two primary reasons we left were resolved: Elevating costs and timely deliveryIf not, we will likely continue to move pieces tactfully to alternate delivery over time. We will be careful to make sure we are still able to provide approx 90% overall penetration and minimize any concerns from advertisers.

The Virginian-Pilot Hybrid mail and alternate delivery

The Virginian-Pilot Hybrid mail and alternate delivery

Ernie [email protected] 757-446-2030

Perry Corsetti, Director of Customer Relations, Philadelphia Inquirer Philadelphia Newspapers100% alternate delivery

Product overview:TMC product called My Community TrendTab paper with editorial content Averages around 28 to 32 pages46 geographical zonesBagged every week Philadelphia Newspapers100% alternate delivery

Product image (Bucks): Philadelphia Newspapers100% alternate delivery

Product image (NJ): Philadelphia Newspapers100% alternate delivery

Philadelphia Newspapers 100% alternate delivery

How many copies converted to carrier delivery? 983,672 copiesPennsylvania - 39 zonesNew Jersey - 21 zonesWhen did you do it? September 2008.18 different phases. What prompted you to make this decision? Strictly expense reduction. Philadelphia Newspapers100% alternate delivery

What has the customer commentary been like? Some advertisers pulled out of the paper.Other advertisers had concerns but were willing to give carrier delivery a chance.What has the consumer commentary been like? Complaints usually first few weeks of each phase.Notification ads in paper.More editorial content help eased concerns. Philadelphia Newspapers100% alternate delivery

How did you handle complaints with a carrier delivery system? Circulation customer Service Department.Complaints then forwarded to email list.What benefits have you seen from your complete conversion from mail? Significant expense reduction. Increased insert business. Philadelphia Newspapers 100% alternate delivery

What negatives have you seen from your complete conversion from mail? Lost circulation.Lost Advertising accounts = less revenue with some accounts.Have you altered your pricing strategy as a result of the changes? Yes for insert business. No for ROP Advertising, with some exceptions. How often will you evaluate your change to ADS? Annually. Philadelphia Newspapers 100% alternate delivery

Philadelphia Newspapers 100% alternate delivery

Perry [email protected] 215-854-5881

Paul Boyle, Senior Vice President / Public Policy, Newspaper Association of America NAA update: proposed postal rate increase and other dialogue with the U.S.P.S.

Newspaper Target Marketing Coalition - WebinarSeptember 15, 2010

Paul J. BoyleSenior Vice President / Public PolicyPostal Alternatives and Rates

47(What We Will Cover)Postal Reform Law Rate Setting Process

Mailer / NAA Opposition

Possible Outcomes in Rate Case

Status of the Elimination of Saturday Delivery

NAA Postal Activi