MAILERS FIND SOLACE IN RATE HIKE

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Business mailers found a silver lining in the Postal Rate Commission's recommendation that second- and third-class rates be raised 14% in January.

Even though that exceeded the 10.3% hike to 32 cents proposed for first class, many mailers actually were relieved. Rate hikes in 1988 and '91 were 24%-plus for advertising, catalogs and magazines.

The Postal Board of Governors by mid-December will rule on the recommendation.

"We're very disappointed, but it is not as bad as it could have been," said Dick Barton, senior VP-government affairs, Direct Marketing Association. "The rate commission is still supporting policies that are harmful to third-class mail and will continue to cause loss of share and dollars for the postal service."

"Our companies will pay about $1 billion more in postage," said Gene Del Polito, executive director of the Advertising Mail Marketing Association.

The postal rate increase boosts the business prospects of competing media. Direct response numbers; targeted ads on TV, radio and in magazines; and direct distribution of ads by newspapers are expected to benefit, as will emerging forms of electronic communications.

"Up to this point, mail was the unprecedented king," Mr. Del Polito said. "But that is becoming less and less the case."

Higher postal rates also are good news for alternate delivery companies Publishers Express and Alternate Postal Delivery, and their newspaper affiliates. Together those services bring more than 150 million magazines, catalogs and advertising mail ride-alongs to 25 million households in 60 major markets.

Catalogers aren't likely to pass price increases on to their customers, said Maxwell Sroge, president of an Evanston, Ill.-based catalog consultancy that bears his name.

Instead, catalogers likely will mail fewer catalogs in 1995; look more to alternate delivery; and accelerate tests of online services, CD-ROM and interactive TV.

Magazine Publishers Association doesn't expect higher second-class rates to lead to higher ad rates or more use of alternate delivery.

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