Seeking Revenue, Postal Service Plans to Deliver More Junk Mail
By RON NIXON
WASHINGTON - Customers might complain about the flood of unsolicited credit card applications, supermarket fliers and shopping catalogs in their mail, but the Postal Service is hoping to deliver even more.
Faced with multibillion-dollar losses and significant declines in first-class mail, the post office is cutting deals with businesses and direct mail marketers to increase the number of sales pitches they send by standard mail, the official term the agency uses for what is less kindly referred to as junk mail.
"Standard mail is the best way to reach your customer," said Patrick R. Donahoe, the postmaster general, during a presentation last month on the future of the post office. "You can advertise on Facebook, but I don't see how you can trace the number of 'likes' to return on investment."
But as the Postal Service embraces direct mail to shore up its faltering bottom line, it faces opposition. Cities struggling to pay recycling and landfill costs to dispose of billions of pieces of unwanted mail are objecting to the expense. Localities estimate that they spend about $1 billion a year to collect and dispose of it.
Some cities have teamed up with a software developer that has come up with an online registry to help cities and residents block delivery of the types of mail they do not want.
In the last five years, more than 100 localities including the cities ofChicago and Seattle have set up, through a private company, online registries that offer residents ways to opt out of receiving catalogs and other mailings that make up an increasing share of postal deliveries. About 48 percent of the mail is advertising appeals, according to
Postal Service data. Last year, Americans received about 84 billion pieces of junk mail.
Several communities like Brookline, Mass., a Boston suburb, have partnered with Catalog Choice, a start-up in Berkeley, Calif., to offer customers a way of opting out of the junk mail. Customers sign up for the service through a city Web site run by the company. Catalog Choice contacts the mailers and asks them to remove customer names from their mailing lists. Since the program began in August 2011, Ed Gilbert, solid waste manager at the town's public works department, said about 10 percent of the city's 25,000 households had signed up for the service.
"One of the biggest complaints that we get in Brookline from customers is about the amount of junk mail clogging up their mailboxes," Mr. Gilbert said. Mr. Gilbert said the service had reduced the amount of catalogs and other items that the city has to haul away for recycling.
In Austin, Tex., which began using Catalog Choice last April, the city estimates that it has shed millions of pounds of waste and saved thousands of dollars in disposal costs by giving residents a way to remove their names from marketers' mailing lists.
"By empowering Austin residents to opt out of unwanted mail and phone books, the city is saving costs while making strides in diverting waste from the landfills," said Bob Gedert, director of the city's resource recovery division.
Chuck Teller, a former PeopleSoft executive who founded Catalog Choice in 2007, said dozens of other cities had also called about the service.
"We have hit a point in our mailbox where the signal-to-noise ratio is out of whack," Mr. Teller said. "It's like watching an hour of TV, and there's 58 minutes of commercials and 2 minutes of programming."
Mr. Teller said his company had processed 26 million stop requests since it began. He expects the number to increase as the Postal Service moves forward with its plans to increase the volume of direct mail.
Dozens of state lawmakers have taken up the anti-junk-mail cause. Bills have been introduced that would create Do Not Mail registries modeled after the popular Do Not Call list. But the legislation has been vigorously opposed by the Direct Marketing Association, an industry trade group, which says direct mail accounts for nearly $700 billion a year in sales and employs more than 10 million people.
So far, none of the bills have passed. The post office's first-class mail volume has dropped by 26 percent over the last five years, and junk mail is one of its most promising growth businesses. Advertisements in the mail have increased over the last three years, and now account for 48 percent of all mail. The Postal Service made $17 billion last year from direct mail, and the agency thinks it can make more.
A report by the post office's inspector general said a new online direct mail service the agency created for small business could generate $1.2 billion in new revenue annually. Under the program, businesses can bring as many as 5,000 pieces of advertising mail a day to the post office, to be delivered by a carrier to every home on a route, without an exact address.
Last month, the agency signed an agreement with Valassis Communications, one of the nation's largest direct mailers, that will provide deep discounts to send out millions of advertising inserts through the mail instead of inserted into weekend newspapers. The agreement could generate up to $107 million in new revenue for the Postal Service over the next three years. The agency said it was willing to explore similar opportunities with other mailers.
"Research indicates consumers look toward their mailbox for relevant and important information, including values and savings," said Mr. Steve Mitzel, a senior vice president at Valassis, which is based in Livonia, Mich.
Postal Service officials say they know not everyone will want to get the unsolicited mailings. The agency said it works with the Direct Marketing Association, which operates its own consumer opt-out program to let customers sign up online or by phone to stop junk mail.
Nevertheless, the post office said it was forging ahead with programs to increase the amount of direct mail it delivers.
"Given our financial situation, continued e-diversion, and increased competition from alternative delivery services, this is one example of how the Postal Service is pursuing innovations and new products to increase the value of mail and retain our business customers," the agency said in a statement