Tuesday, May 3, 2011

Postage goes on Sale this Summer. The USPS plays Texas Hold'em

Rumors CirculatingExcited rumors have been circulating for several weeks now that the post office is preparing to put postage "on sale" this summer.

Rumor confirmed.

But like most rumors—and poker games—there's a grain of truth, a lot of misdirection, and real-time strategies and intricacies that haven't been thoroughly worked out yet. Unlike most poker games among friends, the stakes here are enormous.

Here's the deal as I understand it.

The USPS says that a small number of organizations spending more than $250 million a year on advertising could qualify. These unnamed 16 top advertisers (that's it—just 16 companies are being invited to participate!) will be expected to mail between 500,000 and 1 million pieces each of First Class or Standard mail.

Those are the basic rules. Limited players: only a chosen few can play at these rarified heights.

Lots of mail: this bargain comes at a price for the advertisers. And someone—but I don't know who—is developing a unique set of metrics to measure the success of the campaigns.

Poker GameBut is that someone playing with a marked deck? For example, who wrote "the unique set of metrics?" I dunno. How are these metrics different? "Unique?" I don't know that either. But that is where the cards could be stacked.

On this side of the table, the USPS is putting a lot on the line. If a mailing's response does not achieve "success," (as defined by that "unique matrix"), then the USPS will refund the participating company up to $250,000 in postage.

On the far side of the table, the participating companies have skin in the game, too. If their mailing test fails (that "unique matrix" again), the USPS will not refund printing and production costs.

Explaining the USPS's thinking behind this high-stakes challenge, a USPS spokesperson said "The Postal Service recognizes that... a number of large advertisers do not employ the mail as a key component of their advertising mix. We strongly believe that in any intelligent, integrated campaign, mail can play a part. The objective... is to put our money where our mouth is and to prove to large advertisers that mail will improve the ROI of their marketing campaigns."

Here's the RulesThe "sale" may be extended for as long as two years, but is limited to organizations spending less than 0.36% of their total ad budget on postage. It follows on the heels of other postage "sales" that the USPS initiated in 2009 and 2010 in an effort to boost lagging volumes.

Like a marathon poker tournament, apparently we won't know how this ambitious effort fares for quite some time. Let the chips fall where they may.

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