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Lessons from the Internet Could Save the Postal Service
PostalMag.com, 12 May 2005
Is the Internet a mail killer?

Not hardly! In fact, the Postal Service could make a killing by employing strategies used by Google.com and other Internet sites.

In just a few short years Google.com has become one of the Net's most powerful and profitable entities. As information is power, Google has become all-powerful by listing most every online address on the Net, and providing information about each address. And Google has become all-profitable by connecting Internet users with the information they seek.

The simple beauty of Google's business model is that online advertisers can post their ads online in as little as fifteen minutes. These ads, together with Google's regular search results, gives Internet users highly targeted search results. It is the free market in it's purest state: Total, instantaneous, up-to-date, targeted, information.

Here's how it works:

An online advertiser signs up for Google's Adwords program. After signing in, the user then designs the text ad, or downloads a banner. Designing the text ad is simple, as the ad contains a title, two lines of text, and a Web address. After submitting this information, the user selects keywords for the ad, so that the ad will be displayed at Google.com and affiliated sites when a surfer searches for those keywords. The user then selects how much to pay per click (the minimum is only five cents) and the daily budget. After these few simple steps are completed, the user clicks the submit button and the ads are usually up and running within minutes.

How can this work for the Postal Service?


First Class mail is declining, and the Postal Service is increasingly relying on ad mail for revenues. Besides the revenue problem, there is also the problem with keeping the mail relevant. One solution for the Postal Service has been Negotiated Rate Agreements (NSAs) with major mail advertisers. One such NSA called for the Postal Service to deliver almost a billion credit card offers for a major credit company at reduced rates. While good for the Postal Service's bottom line, this agreement wasn't necessarily good for the relevancy of the mail. This shotgun approach, while effective with a small percentage of recipients, sullied other postal patrons who could only wonder how many more credit card offers they could possibly receive. Likewise, weekly shopping circulars also use a shotgun approach, hitting each and every address with an advertising circular in search of a small-percentage response. NSAs and ad mail can certainly have profitable and relevant futures at the Postal Service, but there are also more efficient solutions, including one modeled on Google's AdWords program.

An Idea

Imagine a Postal Service or private-sector AdMail program where advertisers could log into a secure Web site, design a mail piece, select an area for the mailing, and click "submit." The user could even receive a postage discount for using this automated, online service. (PostalMag.com note: The USPS already has a similar service - NetPost Mailing Online.)

Here's how it would work for Joe's Pizza:

Joe would register and login at the Postal Service's AdMail Web site. Joe would then select from several options, including "letter" and "postcard." After selecting "postcard," Joe selects a "pizza" template from a large selection of templates. (Joe could have also uploaded his own graphic.) Joe then enters the information for his pizza restaurant and information about his pizza specials that will appear on the postcards. After entering this information, Joe selects the delivery areas using an online map that opens in the AdMail site. Options for delivery include entire ZIP Codes and/or certain carrier routes. Options also include "residential," "business," and "apartments." Joe selects the entire ZIP Code of his restaurant and several carrier routes in a nearby ZIP Code. He also selects "apartments" only, so that the mailing will only be delivered to all apartments in the selected areas. Next, he selects the date that he would like for the mailing to be delivered, in this case, the Friday after next.  The cost of the mailing is automatically displayed. Joe pays by credit card. In two days, Joe receives a sample ad in the mail, sent by the printer associated with the AdMail program. Joe looks over the ad and sees that everything is OK. He logs in to the AdMail Web site and hits "confirm" for this ad campaign. The Friday of the mailing Joe is swimming in dough.

Such a program would add relevance to the mail for both the advertiser and consumer. It would enable thousands of small businesses across the country to deliver targeted, timely mailings to consumers most likely to respond. Overall, such a program could boost the American economy in a million, million tiny ways, in a manner totally compatible and supportive of American Capitalism. Adam Smith would be proud. (Adam Smith identified capitalism as an economic system where millions of economic decisions are made daily at the most basic levels, as opposed to Communism where a few economic decisions are made at the top by a political elite. NSAs come to mind.)

Another way the Postal Service could profit by targeted advertising is by developing an opt-in mailing list service.

Background: There are certain similarities between U.S. Mail and e-mail. Mailing list services sell mailing lists for both U.S. Mail and e-mail. Generally, these services charge a certain fee for each mailing address. Usually, the more targeted the list, the higher the cost for each address. Additionally, Internet users can sign up for newsletters at Internet sites. Often, these newsletters contain paid advertisements, usually with ads that relate to the newsletter content. Subscribers to newsletters have the option of opting-out at any time.

Newsletters are now a preferred marketing tool on the Net, as the sending of unsolicited e-mails for marketing purposes has been severely restricted by regulations. These regulations are the result of efforts to curb Spam (unsolicited junk-mail for the Internet). Not to suggest full coverage ad mailings are akin to Spam, but like Spam, the Postal Service delivers a multitude of unsolicited, often full coverage ad mailings each week in almost every major market. Currently, there are a few scattered organizations who oppose these unsolicited mailings, typically for environmental reasons. Currently, these organizations are getting little traction on the issue. But in the future, as populations increase and trees decrease, there could come a time when such mailings are restricted just as online Spam has been restricted.

Opt-In Mailing Lists

By utilizing a centralized system similar to online, opt-in newsletters, the Postal Service could help businesses provide targeted mailings to customers, and reduce the need for inefficient shotgun mailings, thereby making the entire postal industry more efficient. Specifically, the Postal Service could develop a Web site, and perhaps print material, where postal customers could opt-in to mailing lists. (This could also be done by a private company in association with the Postal Service.) The Web site would contain thousands of categories. A few examples include Border Terrier (a breed of dogs), HALO (the computer game) and Scion (Toyota's trendy new car). Do you see where this is going? Imagine that you have a keen interest in Star Wars, and you want all the information you can receive about Star Wars. You could go to the Postal Service's opt-in mailing list site and enter your address information for the Star Wars category. Businesses that offer Star Wars merchandise and info could buy this mailing list from the Postal Service and send highly targeted material to everyone on the list, including you. The opt-in Web site could be promoted a number of ways, including integration with the Postal Service's online Change of Address site. (Perhaps the mailing could be accomplished as described above with the Postal Adwords idea? A business could pay for the mailing list and design the mailing piece online!)

But that's thinking small, something that Google and other Internet giants don't do very often. Google, Amazon.com, and Alexa are just a few of many sites that have developed features to be used at many other sites. Google, for example, offers free search boxes, targeted ads and more for other Web sites. Amazon.com has an affiliate program where Webmasters can post Amazon ads on their sites and get paid when users click on the ad and purchase products and services at Amazon. Alexa offers a traffic ranking tool used by many Web sites. Similarly, the Postal Service could offer a piece of code for Web sites that would display a form field box so that Internet users could sign up for specific mailing list categories. For example, a Web site about Border Terriers could include a small USPS sign up box for the Border Terrier mailing list. Webmasters are always looking for new, interactive features to offer their users. Before you know it, there would be USPS opt-in boxes all over the Internet!

As the Internet gained prominence in the late 20th century there were many who predicted that the Net would eventually be the downfall of the Postal Service. Though the Internet and other electronic mediums are siphoning off some of the Postal Service's business, there is already ample evidence that the Net and the Postal Service can compliment each other in many ways (Internet orders shipped via the Postal Service, for example.) There are certainly many other ways other than the examples provided above. One only has to "think outside the box" for more ideas!


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