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Mondays with Dr. Joe:

March 19, 2007

- Do Not Mail: Are Legislative Efforts Really Necessary?

- There are Already Effective Ways to Cut Down on Mail

- Mail Volume is Changing Already

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Do Not Mail: Are Legislative Efforts Really Necessary?

A recent Advertising Age e-mail newsletter had an article titled “Do-Not-Mail Movement Gains Traction in State Legislatures.” The article says, “More than a dozen states are considering do-not-mail lists. If passed, residents from Hawaii to Colorado, Maryland to New York and Texas to Washington State will be able to sign up for a list and be free of 'junk mail' forever.”

I wrote about this in a posting this past week in WhatTheyThink’s Economics & Research Center, and it did get a rather negative comment from one of the groups behind the effort.

“Do not mail” would be bad for the printing business and direct marketers; but most of all, it would be bad for consumers.  Small and microbusinesses would no longer be able to announce their capabilities by mail. This is paradoxical, because most new businesses in recent years are home-based, saving energy and resources because their owners no longer commute back and forth to work, and many heavily use the Internet for tasks that would have required some form of greater energy consumption pre-Internet.

Most of all, print is an economical way for small businesses to seek customers, especially when they are already legally limited in the kinds of other solicitations they can do by phone—or even in person because of time and logistical concerns. Consumers always benefit when they have multiple businesses competing for their dollars. Limiting that competition by making it more difficult for small and microbusinesses to reach potential customers could ultimately cause market prices for goods to rise, and more importantly, serve as a barrier to entry for those new businesses.

There are precedents to a “junk mail” law. The Do-Not-Call laws have been effective to some degree. Our family did sign up and we no longer get calls asking us how old our windows or roofs are, especially at dinner time. The bulk of the calls we have historically received at the Webb household have been from non-profit organizations. This past October and November, because Rhode Island's U.S. Senate seat was up for grabs in a close race, we were bombarded by political phone calls and polls. I was actually hoping the window folks would call. The Do-Not-Call program was also abused by spammers creating false fears about cell phones and the program. In the first year of the Do-Not-Call law, there were 62 million phone number registrations. If someone was serious about invasion of privacy by phone, there would be a way stop the political and non-profit calls, too.

That said, phone solicitations as a means of sales development was already on a decline. It is one of the most expensive forms of reaching consumers. For almost twenty years, the combination of technology (phone answering machines and voice mail) and the changes in household living patterns (both spouses working, more meals outside the home, even a migration away from land lines to cell phones only) made reaching consumers all the more difficult.

It is likely that any anti-“junk mail” law would also exempt non-profits and political organizations. It's always odd to some that political organizations and institutions exempt themselves from various restrictions that businesses must deal with every day.

The argument will be made that there are substitutes. Remember, electronic media also have had legislative attacks, like CAN-SPAM (which basically created the ground rules which spammers quickly learned to get around, since spam volume is up significantly as reflected in the chart below supplied to WTT by information security firm MessageLabs; we thank them for their assistance).

There are other rumored legislative efforts, such as restrictions on text messaging on cell phones and other devices. Pop-up ads are generally blocked by most Internet browsers. Banner ads have had decreasing effectiveness except when targeted well; yes, online mass merchandising may already be dead. Except for search advertising and search engine optimization, outbound e-marketing may actually suffer. If you can't use direct mail to build your e-commerce business, and especially your CAN-SPAM compliant opt-in lists, other methods are not particularly good substitutes. Despite the law, spam is now 86% of e-mail volume. Businesses that attempt to replace direct mail with e-mail have to deal with the spam quagmire. “Junk mail” has a 99%+ delivery rate; even the opt-in e-mail lists have had problems reaching 80% delivery with certainty because of spam or image or link blocking.

Junk mail restrictions could actually be a boon to offline media. Promotions, event sponsorships, in-store displays, signage, and other methods would get a boost from a direct-mail clampdown. Any printing business that's not already looking at these areas should definitely be doing so.

There are Already Effective Ways to Cut Down on Mail

I admit it: we have made efforts to cut down our “junk mail” using already available methods and they actually work. The means to virtually eliminate junk mail already exists and is available to all consumers. While I felt strange about it—that is, working in the printing industry and asking to receive less print—I realized that guilt ship had already sailed when I started writing about the printing business on the Internet. My value here is that I actually have experience in stopping “junk mail.”

There was a time I was getting more than 30 free trade publications per month. I now prefer to access these online. We created a form letter asking to be removed and would then paste the most recent mailing label, sending it to whatever address was specified for address changes. It worked. I am now the most uninformed person in the industry.

We were receiving a lot of catalogs we did not want. The same method we used for the magazines worked on catalogs as well.

The Direct Marketing Association has a mailing preference service where you can register to not receive mailings from their members. You can sign up online at a cost of $1. We had about eight different combinations of addresses and names, and all it took was a letter to the DMA identifying those and that worked, too. Of course, any organization with whom you already do business is not prohibited in any way from mailing to you.

When our son was four, he started getting some catalogs from a mainstream clothing retailer that was rather suggestive, and definitely not for a four-year-old boy. No, this was not Victoria's Secret or anything like that, but a retailer that specializes in (extremely) casual wear for twenty-somethings. Now that he is 17, I would still find it offensive for him. I couldn't get him off the list for some reason until I escalated my effort and wrote a letter to the CEO. In researching this, it turns out that the Postal Service has a form that anyone can use to remove themselves from “suggestive” mailings that I could have used all along (but there was no Google or usps.gov to help me to locate it at the time).

Our family was constantly getting mail from credit card companies and banks. In those industries, the credit rating services such as Experian, TransUnion, and others, have a web site where you can opt out of those mailings and and any other mailings that rely on their lists at no charge. A person can also register for this service by regular mail. We get no mailings from credit card or financial services companies now other than the ones we do business with. So that worked, too.

None of these mail-avoidance efforts were very time consuming or costly. They took just a little diligence and some postage. The biggest volume of promotional mail was the easiest to deal with: the credit card companies. In the end, these efforts work because no mailer wants to send things to people who might not be receptive to their offerings. Receiving mail was never considered an affront to our privacy.

Mail Volume is Changing Already

Reading the Advertising Age story made me wonder what was happening to mail volumes overall, knowing that printing shipments have been declining for about seven years. I had never looked at mail volumes on a household basis; perhaps there were changes in the market that were already reducing mail volumes. Sure enough, the data comparing 2006 with 2000 tell the tale:

• Since 2000, the number of first class pieces is down -13.4% and -8.5% in weight per household in a year.
• For periodicals, it's down -20% and -21.4%, respectively.
• And for standard mail, pieces are up 4.5%, but weight is down by -3%. This is not surprising because more sophisticated databases and postal incentives for pre-sorting entice some mailers away from first class.
• Overall, the number of pieces of mail that are not packages is down -5.8% and the weight of the mail is down -8.5% per household.

It sounds like “junk mail” is being kicked when it's already down.

The last time an attempt to control communications was approached was the CAN-SPAM act. This clearly did not work, as spam levels are still at a very high level. Spammers have nefarious ways of circumventing the law and technological barriers. The primary reason why spam keeps rising is that each additional spam e-mail has virtually no incremental cost; in fact, the first spam message has no cost either! To be more precise, the spammer offloads the cost of the spam to others in software, firewalls, and other methods of blocking unwanted email, as well as in the cost of lost time. Therefore, because communications costs are absent, they are free to continue to spam to their hearts’ content. They only need a miniscule response rate to encourage their behavior. Spam is annoying and is grand larceny by electrons. In addition, spam uses electricity, which is not renewable or recyclable.

“Junk mail” is totally different. The communicator bears significant costs and risk. Postage is one obvious cost, and printing is another, as well as all of the costs involved in crafting the message. This means that no one undertakes a “junk mail” campaign without having done an analysis of costs and response rates needed to pay for the campaign. Therefore, there is a cost—often quite high—associated with selecting a respondent who does not have the soughtafter characteristics, depending on what is being sent. “Junk mailers” have been at the forefront of using recycled papers and “environmentally superior” inks because they know using them resonates strongly with many customers. Today's “junk mail” is also likely to urge consumers to engage in e-commerce, which is currently perceived as more environmentally benign.

If anyone compares spam with “junk mail,” they are missing an important point. Spammers have virtually no costs or incentives to perform even the most basic tasks that direct mailers do, such as cleaning their lists. The “junk mail” business is far more orderly, with considerable economic barriers against rampant abuse, and proven and workable solutions for opting out.

Comparisons to telemarketing are not totally valid, either. A connected telemarketing call requires the instant physical and personal attention of the person picking up the phone, diverting them from whatever task or act they were engaged in.

With mail, however, recipients choose the time and place for their interaction at their own convenience. The “mail moment” is a cultural mainstay. There is a quasi-governmental agency in the “junk mail” business that relies on preserving that very moment as essential to its survival. That organization, and its workers, are likely to fiercely defend themselves to prevent large-scale Do-Not-Mail legislation.

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