B-to-b firms test shared ad mail

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Madison Direct Marketing Ltd., a company that distributes shared advertiser mail, is making its first foray into b-to-b this month with Pitney Bowes Inc.’s PB Direct division as its partner.

The two companies plan to send a test cooperative mail package to 100,000 Pitney Bowes small-business customers on Aug. 28. About a dozen advertisers have agreed to participate in the premiere mailing, including IBM Corp., Airborne Express and Checks Unlimited. Pitney Bowes’ logo will appear on the outer envelope, with the tagline, "Delivering success for your growing business." Pitney Bowes and Madison Direct will share advertising revenue from the program.

Greenwich, Conn.-based Madison Direct, which sends about 65 million pieces of shared mail to consumers annually, began searching for potential b-to-b partners last year.

"We wanted to take our capabilities into the b-to-b world," said Greg Fennessey, director of business development at Madison Direct. "We knew it was a lucrative category."

The Pitney Bowes database is the linchpin of the arrangement. It includes 720,000 active small-business customers, and the company is eager to maximize that asset. In the past 12 months, it has stepped up its marketing companywide, including efforts by PB Direct, its small-business solutions group.

"This is all part of the big push for marketing programs that Pitney Bowes overall is doing," said Arun Sinha, chief marketing officer of Stamford, Conn.-based Pitney Bowes.

Direct marketing is the largest channel Pitney Bowes uses to acquire new customers. The Madison Direct shared mail program is particularly appealing to Pitney Bowes because it is highly targetable.

"What sold me on Madison was the idea of a selective insertion program," said Mark Hudson, PB Direct’s manager of business development. "They could take our database and select out, say, an SIC [Standard Industrial Classification] like doctors, and we could put offers in envelopes targeted to that SIC description."

Fennessey said there will be hundreds of different versions of the mailer, featuring select offers from a handful of advertisers endorsed by Pitney Bowes. The two companies agree the number in any given mailer should not exceed a dozen to avoid inundating or irritating potential customers. "Not every business will get every offer," Fennessey said. "Too many people will erode the response of the advertisers already in there."

Shared mail competitors to Madison Direct, such as Advo Inc. and Valpak Direct Marketing Systems Inc., are not currently competing in the b-to-b space and say they have no plans to do so.

If all goes well with the initial test, Madison Direct and Pitney Bowes plan to mail another package in November and three more in 2004.

Before linking up with Pitney Bowes, Madison Direct explored potential partnerships with several other b-to-b companies but found "they didn’t bring enough to the table," Fennessey said.

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