Can Ads on Stamps Reduce Post Office Debt?

Lifting No-Ads Stance Could Help USPS Prove Power of Printed Mail

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Back in 1986, an outfit in Houston called American Discount Stamps figured out a legal way to connect advertising to U.S. postage stamps. Or at least its founder thought he did.

The company bought first-class stamps directly from the Postal Service for the going rate of 22¢ each. It then placed the stamps on the upper right corner of 2-by-3-inch adhesive-backed labels, leaving the rest of the space open for advertising, according to a story in The New York Times over 25 years ago.

American Discount Stamps sold the label to consumers in packages of 10 for $1.70 -- or a nickel discount from what the USPS sold them for. Consumers attached the entire label, containing both the stamp and the ad message, on an envelope, which was delivered just like any other mailing, the Times reported.

The ad buy cost marketers 15¢ a stamp with a minimum order of 250,000 stamps, or $37,500. As part of the deal, they could put three coupons in the 10-stamp package, which was to be sold to consumers through 7-Eleven stores.

Among the companies that signed up were Philip Morris, Pan Am, Fuji Film and Sony. Even the Postal Service itself wanted to use the ad buy to promote its Express Mail Service, the Times stated.

A Postal Service spokesman said American Discount Stamps was buying the stamps at full cost, "and after that they can do anything they want with them."

That's what the USPS said at first.

Later—after American Discount Stamps President David A. Lloyd had sunk $3 million of his own money into the business—lawyers for USPS dug up a 19th-century law that could be interpreted as forbidding Mr. Lloyd's idea. And another ruling by the Justice Department and action by the Postal Inspection Service also discouraged such practice by another company that wanted to sell distributorships for discount stamps.

Mr. Lloyd called the Justice Department ruling "a minor, normal government glitch," according to the Associated Press. He may have seen a glitch, but American Discount Stamps doesn't seem to have made it into the 21st century. And its trademark lapsed in the mid-'90s.

What had initially started Mr. Lloyd's stamp idea was a rumor that Coca-Cola and McDonald's had offered to print postage stamps for free in exchange for putting an ad on each one. At the time, the government declined the offer because stamps are considered a currency and only the government can mint money.

But today, billions and billions of dollars in deficits later, can or should the government take such a righteous stand in regard to postage stamps? For that matter, what's wrong with the post office selling ads on the sides of its 200,000-plus delivery trucks?

The timing for such moves seems to be propitious. Megan J. Brennan, slated to become the first woman postmaster general, told The Wall Street Journal, "We've got to compete for business every day, and clearly we have to develop products and services that consumers want."

The Postal Service is already very advertising oriented. Ms. Brennan argues that even in the face of digital selling, advertising by mail is still the best return on investment. Consider "spam email versus a piece of hard-copy communication you can hold in your hand, that's tactile, that you can review at your leisure," she told the Journal.

If Ms. Brennan is looking for ways to demonstrate the power of print, what better way than for U.S. postage stamps to double as advertising?

And the USPS has already loosened up considerably. Consumers have been able to design their own stamps since 2004.

My assistant, Nancy Whelan, said that she and many friends, family and colleagues often pay more than the current rate for stamps to create custom postage through services like She used her nephew's birth photo to have stamps made and sent out his birth announcements with them.

Companies were allowed to take advantage of such programs starting in 2006. Sports teams, real-estate companies and movie studios have all created their own. But customizable stamps such as these come at a premium and are used mostly for a company's own PR purposes -- mailing out "For Your Consideration" Oscar DVDs with a unique stamp -- or as collector's items -- selling stamps to sports collectors.

What I'm talking about is different. Instead of paying a third-party operator marked-up prices to print a small batch, advertisers would pay the USPS to capture the entire stamp run for a given period. And consumers would still pay the same amount (or even a little less) for their stamps, including the Forever stamp that advertisers would pay extra to support.

My colleague David Klein had some interesting thoughts on the subject. "The current mantra among brands is that people love their favorites. They 'like' them on Facebook and follow them on Twitter. So why wouldn't they also want to buy stamps featuring their favorite brands? The Taco Bell stamp! The Oreo stamp! The Jack Daniel's stamp!

"And those corporate logos are often pretty or cool looking -- they'd make great-looking stamps. The post office has done many cool themes for stamps: great Hollywood directors, astronauts, inventors, dogs, cats. Why would brands be any different -- except they'd pay for the privilege!"

David also sees a user-generated angle here, too. "You know how Doritos, for one, runs a contest among its customers for the idea of its Super Bowl ads. Brands could do the same for stamp design."
To clear the way for stamp ads, David concludes, the post office should do a run of stamps celebrating the great men and women of advertising. "Marketing is what made this country great, and we should be commemorating the people who made all that wonderful advertising."

Then bring on the ads themselves shining forth on the face of postage stamps.

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