Sunday, October 16, 2016

New Postal Rates Will Benefit Some Publishers and Printers

Mail that's been sorted by an FSS machhine.
A quiet boycott by some mailers helped persuade the U.S. Postal Service to change how it charges for publications, catalogs, and other flat mail.

As a result, many mailers will pay lower postage bills next year, printers will earn more money from their co-mail programs, and the USPS is likely to benefit as well.

The USPS announced on Wednesday average rate increases of slightly less than 1% for First-Class, Standard, and Periodicals classes, to take effect on January 22. But some customers, including the most efficient mailers of magazines and catalogs, will apparently see their postage bills drop.

The new rate structure will do away with a change first introduced a year and a half ago – separate Standard and Periodicals rates for ZIP codes served by the Flats Sequencing System. FSS rates are higher than rates for non-FSS pieces that are in carrier-route bundles but lower than other non-FSS rates. There was a logic to the separate FSS rates, but they backfired for the USPS.

“Many mailers who previously paid Carrier Route rates for their FSS volume experienced an above average price increase after the new rates were introduced in May of 2015,” the Postal Service said in explaining the new Standard Class rates.

Rate change led to partial boycott
“Since then, FSS volume has declined faster than the volume in other categories of flat-shaped mail” because catalog companies “have significantly curtailed the number of pieces sent to potential new customers (prospecting pieces) in FSS zones. Additional feedback indicates that other flats mailers may be engaging in similar cost mitigation strategies to avoid sending certain pieces in FSS zones.”

Periodicals mailers have little opportunity to engage in similar FSS-avoidance schemes. But publishers, like cataloguers, were talking of legal action a few months ago to prevent the Postal Service from shifting more ZIP codes to FSS, arguing that would in essence be an illegal rate increase.

The new rates would eliminate that controversy. Standard and Periodicals rates will be identical in FSS and non-FSS ZIP codes, so the USPS can move forward with shifting more areas to FSS without pushback from its customers.

The additional volume is exactly what postal officials say the giant FSS machines need to run efficiently. And by restoring some of the incentives to co-mail, the new rate structure should result in flat mail being presented to the USPS in more efficient packages and closer to the point of delivery.

One  failure, one success
Two major investments have been made this century in reducing the costs of handling and delivering flat mail pieces – USPS’s $1.4-billion Flats Sequencing System and the publication-printing industry’s massive expansion of co-mailing.

The FSS so far has failed. But co-mail – consolidating mail from a variety of customers in a way that reduces both the mailers’ and the Postal Service’s costs – has been a huge success.

Such a success, in fact, that it has undercut the ROI of FSS. Thanks to co-mail, more than 70% of flat Standard and Periodicals mail going to non-FSS zones is in carrier-route bundles, up from less than 50% when FSS was first planned. That means much of the Postal Service’s expected savings from FSS have already been achieved via co-mail.

By reducing the incentives to co-mail, the FSS rates actually undercut what the printers achieved. But the January rate structure will restore and actually enhance the incentives to co-mail.

For example, the Periodicals piece rate for copies that are in carrier-route bundles will not change, but the rate for copies in the next-best category will rise by more than 3%. That means the minimum savings from promoting a copy to carrier route will rise from 9.8 cents to 10.7 cents. Printers that use co-mail and other techniques to bring about such shifts typically get a share of their customers’ postal savings.

For publishers that have a high percentage of copies in carrier-route bundles, the savings from eliminating the FSS rates will outweigh the higher rates for less efficient copies – resulting in lower average postal rates.

The picture for Standard flats, such as catalogs, is more complicated. But again it appears that the incentives to improve mail sortation will be greater and that the most efficient mailers will enjoy lower postal bills.

Related articles:

Wednesday, September 28, 2016

USPS Will Continue Dabbling in Grocery Deliveries

The U.S. Postal Service got the go-ahead today to continue trying out the grocery-delivery business for another year so that it can experiment with different pricing and service models.

The USPS told the Postal Regulatory Commission that it's still trying "to determine the operational feasibility and the desirability of making Customized Delivery a permanent product." The PRC approved an extension of the two-year market test for a third year, through October 2017.

"The Postal Service asserts that it has not yet gained sufficient insight into the marketplace in different metropolitan areas to evaluate Customized Delivery’s long-term demand and market pricing," the PRC said in today's ruling.

Postal officials said they were planning to expand the service to additional markets but haven't decided which ones. Current markets served are San Francisco, Los Angeles, San Diego, New York, Sacramento, Stamford (CT), and Las Vegas.

In most cases, Customized Delivery is acting as a delivery arm for AmazonFresh, which Amazon is offering in additional cities without the Postal Service's involvement.

The typical operation seems to involve Amazon dropping off totes full of groceries and other packaged goods to USPS Destination Delivery Units (DDUs), where non-career City Carrier Assistants in turn deliver them early in the morning to customers' doorsteps.

Related articles:

Saturday, July 30, 2016

What Does the Third Law of Plumbing Have To Do With Publishing?

Hard at work in the Production Department
Some of my fellow magazine production managers have been known to quote the First Three Laws of Plumbing: 1) Hot on the left; 2) Cold on the right; 3) Shit don’t run uphill.

It’s the Third Law of Plumbing (our Publishing Word of the Day) that we find especially relevant: You can fling around fancy words like collaboration and workflow, but eventually everything – editorial content, ads, subscriber files, etc. – ends up in the production department, also known as the manufacturing or operations department.

If there’s human fecal matter in the flow, guess who gets to clean it up. While still meeting all the deadlines. And the budget.

I’ve seen savvy operations departments find clever ways to save small fortunes and create new lines of business. And I’ve seen dysfunctional ones miss huge savings opportunities and bring publishers to the brink of ruin.

With print publishing on the decline, you’d think all of us production dinosaurs would be nearly extinct. And, in fact, a lot of good production folks have left the business.

But understanding how to get stuff from one end of the pipeline to the other also gives us a career advantage: In a notoriously siloed industry, where each department typically has a myopic focus only on its own part of the business, someone who knows how to get everything flowing together can be valuable.

It’s no wonder that our industry’s most notorious pundit, BoSacks, is a production guy (not to mention yours truly): Nowhere else are you forced to learn as much about what goes on in the other publishing silos.

Know the flow
Knowing the flow has become more valuable as the shift into multiple media have made magazine – forgive me, magazine-media – publishing more complex and less compartmentalized. Already accustomed to wearing multiple hats and tackling new technologies, I’ve seen some production colleagues morph into roles like web design, email marketing, and data analytics that seem far removed from their dead-tree beginnings.

And never has the need to knit together the various, and growing, publishing disciplines been more critical.

“You can’t always have every relevant department represented in a discussion, so I often find myself looking out for the interests of the missing ones,” says a colleague. “The advertising people think I’m a circulation expert. I’m not, but in the land of the blind the one-eyed man is king.”

Digital publishing products likewise have employees at the end of the pipeline, with a wide variety of titles, who know the Third Law of Plumbing all too well. They too try to keep things flowing while praying that the next flush of content or data won’t overwhelm them with icky brown stuff.

You can create as much native this and responsive that as you want. But the people who can actually knit all that fancy-ass stuff together, make it comprehensible, and then actually implement it are priceless. And, like my production colleagues in the ink-on-paper world, they're largely unsung.

This article is part of our continuing Publishing Word of the Day series, which explores new and obscure terms that will help you make sense of the contemporary content-peddling business. Yeah, we promised one article every day this month, but it's gotten a bit nasty down at our end of the pipeline, so we're extending the series into August. And, who knows, maybe September.

Previous Dead Tree Edition looks inside the magazine industry include:

Monday, July 25, 2016

S&M Marketing: Welcome to the Echo Chamber

Baiting the S&M marketers. It worked.
This weekend, I discovered a fast, easy, and basically useless way to gain new Twitter followers.

Despite having more than 900 Twitter followers, my tweets these days often seem to disappear into thin air, with seemingly no one noticing.

But it’s different when I use the hashtags #SocialMediaMarketing or #ContentMarketing.

For those, the audience and “engagements” (follows, retweets, likes) are roughly four times normal. And all that action seems to come from the practitioners of those two over-hyped marketing methods, even when I’ve trashed them and their kind as charlatans.

So I conducted an experiment on Saturday:

Hypothesis: Using both hashtags in a single tweet will generate lots of new followers, regardless of what the tweet actually says.

Experimental Method: I sent the “basically sucks” tweet you see here on Saturday, followed a few minutes and five new followers later by the “robo-followers” retweet.

Results: In the next 48 hours, I picked up 27 new Twitter followers, almost all of them self-described social-media (S&M, for short) marketers or content marketers (CMs). (Or both, God help us.) I rarely get more than one new follower per day. I was added to two Twitter lists, which basically never happens. And both the tweet and retweet are still getting additional likes.

Conclusion: Hypothesis confirmed. A lot of S&M marketing consultants’ idea of marketing is to set their Twitter accounts to robo-like any tweet about S&M marketing and to robo-follow the sender. The same goes for CMs.

Testing the conclusion: Come “join the conversation,” as the S&Ms like to parrot: Try this experiment yourself -- preferably with a tweet about this article -- and see what happens. Of course, the likers won’t actually read your tweets and the followers won't look into who you are before following you.

ISIS could tweet “Hitler is God #SocialMediaMarketing” and I swear these Pavlovian sleazeballs would follow.

What this means is that any idiot can set himself (they’re usually men) up as an S&M marketing expert and immediately gain cred by racking up a host of followers from the S&M echo chamber. And look, Mr. Unsuspecting Client, every time our expert tweets, he gets lots of likes and even more followers. Wow, he must really know S&M marketing. (He ought to, as much as he tweets about it. But what can he actually do for your business?)

So what does robo-following, our Publishing Word of the Day, have to do with publishing? The S&M marketing and CM hype networks have for the most part set themselves up as enemies of advertising-supported publishing. (“Why do you need to pay for advertising? Everyone is on Facebook. So just let us set up a Facebook page for you. It's free -- except for our fees.”)

Some of what publishers offer, such as native advertising, is arguably content marketing. The CM purists, however, will have none of that, insisting that Paid Media doesn’t count, that CM marketing must be free. (“But pay me within 15 days or your blog is toast.”)

Don’t get me wrong: Not all S&M marketing and CM are a useless waste of time and money. Just the vast majority.

Set your social-media accounts to robo-follow Dead Tree Edition’s 31-part Publishing Word of the Day series, which explores such useful new terms as Facehumping and denialsizing.