POSTAL HIKES BUOY MEDIA AND DIRECT MARKETERS

By Published on .

The Postal Rate Commission's rate increase recommendation offers generally good news for media and direct marketers, with the only bad news going to non-profit publishers and saturation mailers like Advo.

Deciding to trim by a third the revenue increase the U.S. Postal Service requested last July, the commission last week gave other mailers some relief.

If the postal service Board of Governors approves the commission's $1.6 billion rate hike recommendation, magazine publishers' rates will rise an average 4.6%-slightly more than the 3.9% recommended by the postal service but far less than the 6% to 10% boost that had been feared.

NON-PROFIT RATES UP 8%

Magazines like National Geographic, Modern Maturity and Smithsonian, and others produced by non-profit organizations, however, would see rates rise 8%.

"The postal service is getting a bit too pricey," said Neal Denton, executive director of the Alliance of Nonprofit Mailers, "and what you are going to see is non-profits looking for other ways to deliver."

Mr. Denton and Postal Rate Commission Chairman Ed Gleiman attributed the high increase to the postal service's basing its request on 1996 costs, when several changes in classification rules for non-profits caused temporary problems, raising the postal service's expenses in dealing with non-profits.

The commission suggested the postal Board of Governors delay the effective date of any hikes until next year.

BIG PAPERS PLEASED

Bigger newspapers, which don't use the mails much, were pleased that the commission didn't accept a postal service recommendation to cut rates 5% to 18% for the saturation mailers that compete with free-standing inserts. Instead, saturation mailers will face a small increase, as the "regular" commercial rate climbs a proposed 1.2%. Some direct marketers will see rates actually drop.

Advo, however, indicated it wasn't too upset at having to settle for a rate increase that was still below the rate of inflation.

"Although the Postal Rate Commission did not recommend rates as proposed . . . we are nevertheless pleased that their recommended rates are consistent with the postal service's new ratemaking approach, including toward advertising mail and are less than the rate of inflation," Advo Chairman-CEO Robert Kamerschen said in a statement.

In this article:
Most Popular