Chiang,Mai,,Thailand,-,Mar.,24,2019:,Man,Holding,Xiaomi,Mi

Are You Testing the Latest Digital Channels?

by DataDigital MarketingMarketing StrategyMarketing Trends

The power of data & analytics is real. Combined with resourceful leadership, your brand will soar. But, sometimes even with great data & analytics in place, you may see performance softening. The best solution to address this? Our answer: testing.

At Media Horizons, we have always believed in the value of testing. By strategically testing, brands can further identify more active audiences, more effective channels, more relevant content, more precise geographic locations, and other areas for growth. In fact, targeting has never been so accurate, especially through the lens of direct response marketing.

However, we understand that what seemed new and innovative a few years ago may not be so relevant anymore. We thought it would be helpful to share new channels to test today – and how they can positively impact your omnichannel strategy.

Voice Search Optimization

As a form of SEO, it is the optimization of keywords and keyword phrases for searches using voice assistants (source: Tech Target). Think, “Hey Siri…”

Back in 2018, voice searches made up 20% of Google search queries (source: Tech Target). Today, 50% of the U.S. population use voice to search daily (source: UpCity via Oberlo). Not surprisingly, smartphones and smart speakers are the most popular devices for voice search, but watches, TVs and home appliances are slowly gaining momentum.

Voice Search is most easily tested with PPC. With PPC, marketers will receive more detailed reporting that can be used to optimize future search initiatives. We recommend starting with a smaller budget. This capability is well-suited for location-specific businesses as you’re able to test into query modifiers such as “near me,” “open now,” “local,” or “find me.”

Results from Voice Search tests can have numerous applications for brands, including website optimizations (i.e., content should be written in natural language to capitalize on how people speak), business intelligence on any differences in search queries using voice, and more. 

Chat Bots

You’re likely most familiar with chat bots for customer service inquiries or scheduling appointments. However, chat bots are an interesting digital channel for marketers to test.

Officially, chat bots are “computer programs that use artificial intelligence (AI) and natural language processing (NLP) to understand customer questions and automate responses, simulating human conversation,” according to IBM. While they add efficiency to daily lives, what you may not know is that this technology is everywhere today. Because of this, brands can personalize more shopping experiences. (source: IBM). Chat bots have the power to improve customer engagement and brand loyalty, reduce costs and boost operational efficiency, generate leads, and increase customer satisfaction (source: IBM).

Consumers often use chat bots to locate retailers, restaurants and businesses. Therefore, there is a hyper local search element here. More specifically, chat bots are ideal for lead generation as they allow you to capture important prospect information for a sales team to follow up on. They are also available 24/7 which is a huge benefit for businesses.

Social Video Marketing

The idea of creating videos for marketing purposes. Therefore, the focus is on creating something engaging for social media (source: Medium). Today, consumers are consuming 2.5+ hours of video on a variety of platforms such as Snapchat, TikTok, Instagram, Facebook, Twitter, Reddit, and others (source: Statista, Techjury). As of this year, 93% of companies have acquired new customers via social media video (source: Sprout Social).

Video gets more exposure and engagement on Instagram specifically as the algorithm favors these assets. This allows you to get in front of potential consumers easier and at a higher frequency than with standard images. Video brings a level of personalization to your brand that helps connect better with your audience. Video is a powerful sales tool. It allows brands to showcase products or services in a dynamic way, adding valuable context that is not possible through a photo. Specifically, TikTok and Instagram Reels are booming. As younger generations come into shopping ages, it’s critical to have your brand present in the channels they are using. If you’re not testing these channels, you’re missing out.

Social video testing should be focused on creating engaging, quality content that resonates with your target audience – and have your audience engage with your brand.

Testing should always be part of your Marketing strategy, keeping your brand at at the forefront of new channels, technologies and customers.  

Are you interested in learning more about which channels could be more impactful to your audiences?  If so, contact us today for more information and a consultation. 

Last month, RIS – Retail Info Systems reported, “To continue to grow profitably, retailers need to unlock new revenue opportunities.” We couldn’t agree more. Digital transformation and brands’ ability to adapt will augment success. We can help with this adaption.

Cartoon-Person-at-Computers_re-scaled

Tom Says… Here’s What You Need to Know About the Latest USPS News

by DataDigital MarketingDirect MailMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Recently we sat down with our colleague, Tom VanWestrienen, also known as our resident USPS expert. We thought it would be helpful to share that latest USPS news with you – and what this means for your direct marketing efforts.

On January 22, postal rates for all classes of mail were increased. Average increases by class were +4.20% (First Class), +6.25% (Marketing Mail Flats), +3.29% (Marketing Mail Letters), +4.20% (Periodicals), and +20.49% (Parcels).

While we know this news is less than ideal, we’re here to help you optimize your direct marketing strategies in the most efficient way possible. In fact, we are excited to share several incentives that would help offset some of your clients’ new costs. Check out our recommendations here: 

  • The USPS is offering a 5% postage discount for their Tactile, Sensory and Interactive promotion from February 1 – July 31, 2023 on First Class and Marketing Mail products. The USPS has approved this promotion for mailing direct mail on coated paper stocks (coated gloss, matte, soft gloss, SCA, etc). 

Our recommendation: All direct mailers should consider applying for the promotion to mitigate the recent January 2023 postal increases.

  • Adding to the Tactile, Sensory and Interactive promotion to maximize postal savings, direct mail marketers should plan on seeking the 2023 Informed Delivery promotion running from August 1 – December 31, 2023. As with 2022, the USPS is offering a 4% postage discount for using Informed Delivery. This provides direct mailers with an effective USPS promotion strategy spanning all of 2023.

Our recommendation: With USPS increases happening twice a year for the foreseeable future, it is critical for customers to come up with an effective strategy that provides savings opportunities throughout the year. Many direct mailers embraced the Informed Delivery promotion in 2022 and this promotion should be mandatory in 2023.

  • The USPS is again offering the Emerging Technology from May 1 – November 30, 2023 (3% or 4% incentive). If customers opt for this promotion, the USPS is offering a new promotion called Retargeting, which provides a 5% incentive from September 1 – November 30, 2023 for Direct Mailers sending out First Class postcards to recent visitors to their website or mobile apps that did not convert.

Our recommendation: There has never been a better time to explore retargeting as an acquisition tactic. If you are not currently retargeting your website visitors, get in touch with us to implement a solution. 

It is important to note that registration for these promotions needs to take place in the Business Customer Gateway (BCG).  Many of these promotions require advanced USPS approval to ensure the mail pieces meet the requirements of the promotions. Located within the BCG is a Mailing Promotions Portal (MPP), brands can seek approval for individual mail pieces. Refer to the guide here.

Insider Tip: The USPS encourages all approval requested to be entered through the MPP. All samples being sent for USPS approval must be shipped through USPS products, UPS and Federal Express packages will not be accepted.

Unfortunately, Tom says to expect another postal increase in early July. At this point, the impact of this increase is unknown, but changes in the 3-6% range should be expected.

Considering this news (and anticipating more changes!), there’s never been a better time to explore relevant digital channels to help maximize your offline investment. We can help support with various audits to provide valuable insights and recommendations. Diversifying your media mix will propel your business forward.

As always, we asked Tom to describe today’s print marketing environment in one word. For the beginning of Q1 2023, he said “defensive.” Specifically, Tom shared, “It feels like one on one basketball right now. We’re all trying to react effectively while not knowing what challenges the USPS is going to drop on mailers’ laps these days.” Let the teamwork continue so we’re all shooting nothing but net with our marketing campaigns!  

Safety,Concept:,Closed,Padlock,On,Digital,Background

How Artificial Intelligence (AI) Can Benefit Marketers

by DataDigital MarketingMarketing StrategyNews

Last week, we reported all there is to know about the transition to GA4. In that piece, we specifically talked about machine learning and its application within reporting tools. Today, we’re excited to discuss how Artificial Intelligence (AI) can benefit marketers and enhance your business more broadly.

Defining AI

Let’s start by first defining some key terminologies and explaining the difference between them:

->Artificial Intelligence (AI): Advanced technology that allows machines to mimic human behavior through vast amounts of data, intelligent algorithms, and patterns. It is the broader concept that machines can carry out tasks that humans would consider “intelligent.”

-> Machine Learning (ML): A subset of AI that uses statistical data sets, adapts with minimal human involvement and evolves independently as it ingests more data. ML is considered one of the applications of AI.

Why Marketers Should Care

If implemented and utilized correctly, AI can be incredibly helpful for marketers. AI offers advertisers the power to…

– Improve the customer journey and create more personalized experiences

– Create more efficient and effective marketing campaigns and improve business impact KPIs (acquisition costs, ROI)

– Gain insight into target audience through big data and ML

– Create and develop content, PPC ads and even web design

– Utilize chatbots for campaign purposes, customer service and more

Google and OpenAI

Google and OpenAI have been in the news recently for their AI contributions and we expect this to continue to develop across industries.

Right now, Google’s technology is expected to be more relevant. Earlier this month, Google announced its new AI chatbot, “Apprentice Bard.” Apprentice Bard is like ChatGPT, but Apprentice Bard’s answers can include recent events (source: CNBC).

How can Apprentice Bard do this? “Google can crawl the web in almost real-time and process that information faster than any other company,” reported CNBC.

For example, Apprentice Bard picked up on the news circulating about the Google layoffs and was able to respond immediately. We have no doubt that Google will continue to add innovation to Apprentice Bard. We are excited to see how OpenAI will respond with ChatGPT and InstructGPT. Stay tuned!

How Marketers Can Use AI

AI can dramatically improve targeting for advertisers. With ads that are “more realistic, engaging and versatile than ever before,” Data to Biz and Times of India predict that “AI will take up 80% of global advertising spend in the world.” For application, advertisers can use AI to:

– Segment more relevant audiences by applying behavior trends and pattern data

– Automate tasks like copy and creative development

– Improve targeting

– Improve reporting with more real-time enhancements, predictive forecasting / modeling, and more personalized recommendations

At Media Horizons, we believe that AI needs to be the focus of how we innovate. AI will continue to grow in utilization and will eventually impact multiple facets of marketing and thus, business success. It’s important to start the conversation now! Reach out to us today to talk about ways that we can integrate AI into your campaigns and reporting. We are excited to see where industry benchmarks change, and how we can work together to stay on top of them.

Additional Sources: Jumpstory.com, Martech.org, Meltwater.com

Intelligence (BI) and business analytics (BA) with key performance indicators (KPI) dashboard concept.StartUp Programming Team. Website designer working digital tablet dock keyboard.

How Advertisers Can Prepare for the GA4 Transition

by DataDigital MarketingMarketing StrategyNews

Since its inception, Google or Universal Analytics (GA) has established itself as a key platform for today’s marketers. It’s no secret that GA helps companies explore who their customers are – featuring information such as demographics, location, retention, and device technology. Because of GA, marketers have been able to more accurately interpret the impact of marketing campaigns and segment audiences accordingly.

Google Analytics 4, or GA4, is the newest iteration of GA. All GA users will need to transition to GA4 by July 1st, when Universal Analytics will stop processing data. Keep reading to discover what you need to know to prepare for this change!

About GA4

According to Google, GA4 will enable users to measure traffic and engagement across your websites and apps, effectively combining data across platforms in the same property.

Key Components of GA4

  • – Collects both website and app data for brands to better understand their customer’s journey
  • – Uses event-based vs. session-based data
  • – Includes privacy controls like cookie less measurement and behavioral and conversion modeling
  • – Predictive capabilities offer guidance without complex models
  • – Direct integrations to media platforms help drive actions on a brand’s website or app
  • – For more specific details, visit here

Recent Developments

Earlier this month, Google revealed that it will automatically create a GA4 property for users starting in March if you have an eligible GA property.

While this should allow users a sigh of relief (believe us, we get it!) if you have not yet made the switch, it is important to know that this should be the start – not the end – of your migration process (the end will be July).

This latest update from GA is a good start and should help more brands get over the initial hump of implementation. Furthermore, it will allow brands to get familiar with the platform’s new interface and selection of tools.

How Your Brand Will Be Affected

With innovation comes opportunity. We are excited to work with both our partners and clients to determine how GA4 can be used more effectively and efficiently to drive business insights.

In fact, the new key components can be used to improve business decisions. Here’s how:

  • Collects both website and app data

Why this is important: The cross-platform analytics can help give a more unified view of the customer’s journey.

  • Uses event-based data vs. session-based

Why this is important: Events give additional insight regarding details like button clicks, form completions, external link activity, and more. Therefore, there will be major differences in how data is measured, analyzed, and applied to business decisions. (source: Lookinla.com)

  • Includes privacy controls like cookie-less measurement and behavioral and conversion modeling

Why this is important: With more brands and legislature taking a privacy first approach, GA4 is addressing similar challenges and proactively offering solutions including IP anonymization, data storage duration settings, and more.

  • Predictive capabilities offer guidance without complex models

Why this is important: Machine learning can help define trends in customer behavior and create more actionable segments to target. This can also allow for more efficient ways to assume business outcomes.

  • Direct integrations to media platforms help drive actions on a brand’s website or app

Why this important: Not only will this facilitate more business insights, but it will provide improved functionality and ease of access. This will make in-app social sharing more seamless (source: SocialMediaToday.com and ToTheNew.com).

If you’re unsure of what some of this means, or how it will impact your business, we can help! Reach out to us here.

Our Recommendations

At Media Horizons, our goal is to provide consistent updates and a helpful starting point for you during this transition period. Overall, we think it is helpful to keep high-level and overarching goals in mind, so you can stay focused on your business objectives and growth. Here is what we would recommend:

  • – Define your overarching objectives and goals with the migration
  • – Operationalize the migration for a seamless experience
  • – Develop enhanced marketing strategies that leverage the new tool suite
  • – Create more robust segments to measure success / impact on business
  • – Analyze results and improve business practices based on insights

We understand that this is a lot to absorb and may be overwhelming. Did you know that we can set up your brand’s GA4 account for you and ensure a seamless transition?

More specifically, we are available to provide support, guidance, and resources to help with the migration (initial setup, advanced configurations, setting up goals and events, updating dashboards/reports, etc.). We deliver dynamic full-service solutions to meet your brand’s marketing needs! Get in touch to begin your GA4 transition today.

On a different (but related!) note, have you heard about Google’s new AI chatbot named “Apprentice Bard?” Google is just the latest platform to enter the conversation about AI. In our opinion, there are many potential opportunities for AI in advertising. Stay tuned for our next blog about AI and why marketers should be interested in it.

Close-up male hands using smartphone on city searching or social networks concept, hipster man typing an sms message to his friends

The Impact of Privacy Settings on Digital Advertising

by DataDigital MarketingMarketing StrategyNews

What Changed and Why?

Beginning in 2020, we started to prepare our clients for the iOS 14 update. Even then, data privacy was top-of-mind for marketers. With the iOS 15 update underway, it is more relevant than ever today.

Apple created the ‘Apple ID for Advertisers (IDFA),’ which is used to help advertisers (and brands) measure ad effectiveness through a series of engagement and conversion indicators. This also allows social media platforms to track devices and people at an individual level. Historically, the data applied to 100% of audiences AND allowed for various levels of data including visitation, engagement and click behaviors as well as purchase detail for both the platform and brand site. 

With these iOS updates, Apple iPhone users have been permitted to opt-out of brands’ (company) websites/apps and social platforms like Facebook and Instagram tracking their behavior – that is, across apps and websites owned by other companies. Did you know it’s estimated that ~96% of iPhone users opt out of app tracking today?* 

Additionally, many brands have taken a privacy-first approach and are requiring cookie consent when a consumer enters their website. This comes with varying degrees of options that are defined by local legislature, brand risk appetite and data best practices. Some brands take a simple yes/no approach while others feature layers of options for what can and cannot be tracked to consumers.  

As data-driven marketers, we understand the severity of the situation. Unfortunately, these updates affect today’s marketers and brands’ omnichannel strategy most. However, with all challenges come opportunities. We’re here to share what you need to know, how your business can adjust your marketing strategy to be more effective and share our predictions for the future.

Today’s Situation

  • Tracking is now significantly limited.
    • Currently, a consumer’s experience on a given app or platform will not change, regardless of their tracking status.
    • However, if a consumer opts out of tracking via the iOS update by selecting “Ask app not to track” then the app developer will no longer have access to the IDFA tracking code. This means the app – Netflix, Drizly or Ticketmaster, to name a few – will not know the individual device, where the consumer came from (source) or the consumer’s behaviors (i.e., any click or engagement actions) while in an app like those mentioned above.
    • Right now, Android and its browser, Chrome, allows users to not be tracked, but it is not yet as prescribed as the iOS version (however, we predict that it’s coming!).
    • This scenario also adversely affects remarketing campaigns because the consumer is not identified as having visited the platform. For example:
      • A consumer selects “Ask app not to track.”
      • That consumer visits Facebook and clicks through various links, and ultimately clicks through to the brand website to make a purchase.
      • Facebook would report a general conversion event (in this case, a click-through to the brand site) and the brand would report the transaction. However, because the consumer requested to not be tracked, the brand would not know that they came from Facebook or their engagement while on Facebook.
  • Social platforms like Facebook also made some adjustments to their reporting methodology. Prior to the updates, Facebook had a default setting for a 28-day click or one day of viewing your ad to attribute a purchase. Since the iOS 15 update that has changed to a seven-day attribution model to offer a more realistic view of ad performance for the platform. This means that if a consumer clicks on your ad and makes a purchase from Facebook the next seven days that behavior will be attributed to a brand’s marketing campaign.
    • Using the above Facebook example, if the transaction happened within seven days of being exposed to the ad, they would attribute the transaction to the brand’s ad campaign.
  • If a consumer opts out of cookie consent on a brand’s website, the brand will no longer know who that consumer is, what source they came from, or what they engaged with while on the brand’s website. They will still know if that consumer makes a transaction, as well as the contents of the basket. Due to reduced tracking capabilities, visitation numbers will skew lower. For example:
    • Brand A has 100,000 users visit their website, but 20% of them have opted-out of cookie tracking.
    • Google Analytics will show that 80,000 users visited the website.
  • Purchase data is still trackable. This means that brands will still see 100% of the transactions – on social platforms and on their brand eCommerce sites – but will not have additional data on what the consumer did leading up to that purchase (if the consumer has opted out of tracking).
    • Using the above example, let’s assume that Brand A also had 5,000 transactions.
    • Google analytics would show 5,000 transactions.
    • However, the conversion rate would be calculated using the 80,000 vs.100,000, resulting in a 6.25% conversion rate instead of the actual rate of 5%.
  • Brands can expect lower “reported” visitation/audience sizes, more inflated conversion rates, changes in reporting, and how that data can be used for advertising. 

To summarize, if a consumer opts out of tracking, the brand will only know about the purchase itself; they will lose valuable information including who the consumer is, what source they came from, and what they clicked on. This affects performance marketing elements including targeting, optimization, and reporting, and should be accounted for in marketing strategies.

Pro Tip: Beware of inflated conversion rates! In theory, brands will still have the same site visit volume, but that data will no longer be available in Google Analytics, or its respective reporting tool (due to the shifts in cookie consent and iOS tracking). However, the transaction data is still 100% of the true purchase audience. Google Analytics will recognize lower visitation, so a brand’s conversion rate will appear higher. In reality, it likely is not.

As marketers, we’re all navigating these unchartered waters. We’re here to be your partners and provide as much insight and real-time updates as possible. In fact, we are pleased to offer you a more detailed report which includes what these updates mean for you and our predictions. Reach out today for this white paper!  

*Source: Apple Insider. Please note that purchase data is still trackable, but with limitations on who the consumer is and how they entered and engaged with the platform. 

**Source: Statisa.

Beginning,And,Start,Of,The,New,Year,2023.,Preparation,For

2022: A Year in Review…

by DataDigital MarketingMarketing StrategyMarketing TrendsNewsOffline StrategyUSPS

Here’s what we think: 2022 was anything but 2020-Too. If you caught our post last December, we were cautiously optimistic about this year. Bricks-and-mortar continued to hold their own, marketers weathered the storm of privacy concerns and iOS updates and navigated more media channels than ever before.

When we look back at 2022, there are some key trends that come to mind… and get us excited for 2023! Let’s review:

  • Paper Is on Its Way Back!

In July, we reported that paper supply remained tight, and prices were continuing to climb due to steady demand, reduced capacity, and high input costs. Today, demand is softening somewhat, prices are holding steady, and paper is generally becoming more available. Whereas most paper mills have been on allocation or even moratorium, these supply restrictions are easing and the global paper shortage that we have been experiencing is abating. 

That said, so much capacity has come out of the market in the past decade that pricing is expected to remain at elevated levels, especially if demand stays steady in the first half of 2023. Graphic paper supply will continue to decrease in the coming years as mills continue to diversify their product mix. Several mill conversion announcements have already been made that will significantly impact supply going forward. Aligning with strategic suppliers will be paramount for end-user customers.

As direct marketers, we believe in the power of offline media. In fact, marketers have combatted paper challenges with increased use of direct mail, clever interplay between offline and online efforts, innovation with page count and circulation, and more. We’re excited to see where offline media goes in 2023.

  • Shifting Consumer Behavior

While we haven’t been surprised by many trends that have soared in popularity in 2022 – the power of personalization, volume of online shopping and an interest in sustainability – there is inarguably power in consumer behavior. In many cases, changed interests and values have resulted in brands shifting their retail strategy and product innovation.

However, what has also resulted in brands’ shifting strategies? Inflation. “Inflation has driven up the cost of all goods by 8.2% between September 2021- September 2022,” according to the Bureau of Labor Statistics (source: Nerd Wallet). It’s important to note that inflation has affected some categories more than others, such as food versus clothing prices. Will there be any relief in 2023? Will supply chain issues resurface? We’ll all have to stay tuned.

  • Data Is Everything

At Media Horizons, our “secret” is placing emphasis on intensive data and analytics to grow our clients’ businesses. Today, online to offline attribution is a major pain point for many companies. That said, without a quality attribution model, upper funnel media has been intensely impacted. Check out more reasons why data (and attribution) are everything!

  • The Future of Paid Social

In 2022, Facebook and Instagram targeting saw a greater impact from Apple’s privacy restrictions that went into place in 2021. Advertisers have had to experiment with a variety of targeting tactics, including broader targeting and more tightly targeted ad copy.  

Audience targeting challenges will continue into 2023, but Facebook and Instagram’s automated targeting has been yielding success in the absence of audience targets that have been removed.

We recommend that advertisers test newer Paid Social platforms like TikTok and BeReal. to see what kind of traction they can get, and diversify their ad formats, such as expanding to Instagram Reels.

  • Postage Updates on the Horizon

In 2021, the industry saw two significant postal changes resulting in double-digit increases for catalogs (Marketing Mail flats) and near double-digit increases for Direct Mail (Marketing Mail letters). In case you didn’t catch the exact percentages, get familiar with them here. The USPS has recently announced their next increase, which will take place in January.

There’s never been a better time to be strategic about your direct mail strategy. Consider changing to a different format – encourage creative thinking with your vendors – and add innovation to your strategy accordingly. Stay tuned for our next “Tom Says…” in which we’ll share everything that you need to know about the USPS updates.

When we look back at trends from this year and ahead to 2023, there is one key theme that comes to mind: omnichannel. The value of an omnichannel strategy is unmatched. If your media mix does not include both online and offline channels (that are working together!), your brand is not as strong as it could be. Be the change and future-proof your business. Connect with us in 2023 to propel your business forward.

 

Cartoon-Person-at-Computers_re-scaled

Tom Says… Here’s What You Need to Know About the USPS Today Part II

by Direct MailMarketing StrategyNewsUSPS

We’re excited to share Part II of our conversation with Tom VanWestrienen of Eliezer Consulting. In follow up to last week’s conversation, we wanted Tom’s perspective on how to handle these USPS updates. For example, are there any opportunities that these changes could present? How can brands adjust to these changes in a positive way? Here’s Tom’s take:

Q: Since it will affect the above formats, how can brands prepare / update their DM strategies accordingly?

Consider changing to a different format. Updating the physical make-up of a piece can move it to another, less expensive rate class. At this juncture, creative thinking while partnering with your vendors on strategy would provide the best overall outcome (we’re talking response rate and cost-efficiency!).

Q: What are some other opportunities that these increases present?

Are you fully utilizing opportunities offered by your printer? Processes such as co-mail or co-bind can reduce postage by improving sortation levels and increasing discounts. Additionally, the USPS offers several promotional discounts which can reduce postage by 2-4%/piece (See 2022 promotional calendar here). The USPS is also continuing the promotional discounts in 2023 with discounts up to 5%.

Q: What are some tips for preparing for the all-important holiday season?

Make sure that every customer is using cooperative mailing programs to minimize postage costs. Co-mailing for flats & periodicals and commingling for letters are cooperative mailing programs that should be used whenever possible. Also, the USPS offers mailing incentives that are too good to pass up. Today, the USPS offers a 4% immediate postal reduction if a direct mailer is using their Informed Delivery program. This program started August 1st and runs through December 31st. The USPS offers other incentives throughout the year and for minimal effort, these savings really add up. We can help you utilize and manage this!

Q: Do you think that we expect any leniency / decreases in early 2023?

Unfortunately, we do not anticipate postage reductions in the future. Postmaster General Louis DeJoy is operating the USPS as a business, and as outlined in the Delivering for America plan, he is focused on achieving financial stability and service excellence at the USPS. 

Q: Tom, can you describe today’s catalog and direct mail market in one word?

Challenging – but there are solutions that help navigate increased postal costs! Let’s have a conversation. Don’t hesitate to reach out!

We hope you enjoyed the first of our quarterly USPS updates from Tom! Each quarter, he’s going to describe the catalog and direct mail market in one word… we’ll see where we net out around this time next year! We’re excited about what the future holds for offline marketing and look forward to partnering with you. For now, that’s what Tom has to say!

 

Cartoon-Person-at-Computers_re

Tom Says… Here’s What You Need to Know About the USPS Today

by Direct MailMarketing StrategyNewsUSPS

Would you have ever thought the USPS would be such a hot topic? We didn’t! However, the last few years have proven to be challenging when it comes to postal rate increases and how they affect brands’ catalog and direct mail strategies. That said, with challenge, often comes opportunity and reward.

We sat down with Tom VanWestrienen of Eliezer Consulting to get his take on the latest hikes. Not only are the changes daunting, but they can be difficult to understand. Tom is here to tackle some of the tough questions, and hopefully help future-proof your offline strategy. He’s seen it all in his 35 years working with catalogs and direct mail.

Q: What are the latest USPS rate increases for catalogs and direct mail?

The industry saw two significant postal changes in 2021 resulting in double-digit increases for catalogs (Marketing Mail flats) and near double-digit increases for Direct Mail (Marketing Mail letters). On July 10, 2022, the USPS again increased postal rates on average by 8.5% for flats and 6.5% for letters. While these are averages across each class of mail, one really needs to understand the changes on each postal sortation level to fully comprehend how the postage increases impact a customer’s mailing.

A few examples of this are in the August 2021 increase: Larger catalog mailers who consistently achieve high density and saturation sortation levels saw increases in these categories in the range of 11% – 14%, but the USPS impact the Marketing Mail flats class was published at 8.5%. On the latest July 2022 increase, non-profit flats saw significant increases in the range of 11% – 18%. Also, heavier catalogs approaching 16 ounces saw much smaller increases in the range of 2% – 4% with the latest postal increase.

The USPS has also recently announced their next increase, which will take place on January 22, 2023.  Marketing Mail letters can expect an increase of 3.3% while Marketing Mail flats should expect an increase around 6.3%, but just like the 2021 increase, the USPS is hitting high density and basic carrier-route sortation levels more significantly. This results in surges much higher than the announced flat increases for direct mailers who regularly achieve these sortation levels.

Q: Why are there increases for catalogs and direct mail?

To achieve financial sustainability, the USPS is now allowed to pass along two increases annually, one in late January and the other in early July. 

The USPS now determines postal increases based on four factors:

  • – Consumer Price Index (CPI) impact
  • – Address density impact
  • – Retirement funding for its workers
  • – Underwater products in compensatory classes

Current underwater products include Marketing Mail Flats, Marketing Mail Carrier-Route Flats & First Class Flats, which is why their rates are being increased.

Each increase will include some or all the components depending on specific rules around when or how they can be applied to postal increases. We expect that in the next couple of years, the USPS will annually pass along one large increase and one lower increase as they work to become more financially sustainable. Past increases based solely on a CPI factor are no longer in place. Underwater classes will see at least a 2% surcharge on postage to normalize pricing to cover costs.

Q: How will this affect print production and circulation planning?

While costs continue to escalate, direct mailers have been hit especially hard these past few years. One would think that there will be circulation and/or page reductions to help minimize these escalations. We would also expect direct mailers to change the formats of their programs. While overall catalog costs have elevated significantly in the last three years, letter mailing may still be an attractive alternative for direct mailers. “Slim Jim” and letter sized all-inline formats should become more popular because the cost to mail these types of products are much more affordable.

 

Stay tuned for Part II of our conversation next week! In our follow-up conversation with Tom, we discuss how brands can prepare for the all-important holiday season and update their DM strategies for 2023 based on the upcoming USPS changes. Be sure to check in next week!

 

Printing,House.,Checking,The,Print,Quality,And,Accepting,Color,Proofs.

How Marketers Are Responding to the Global Paper Shortage

by Direct MailMarketing StrategyNews

Direct marketing is arguably the way forward. To be an effective omnichannel brand, print marketing efforts should be included in your strategy. In fact, did you know that there is 400% effectivity of marketing campaigns that combine print and digital ads? (source: Finances Online)

Additional Stats to Keep in Mind:

  • – 95% of people under 25 read magazines
  • – 82% of consumers trust print ads the most when making a purchase decision
  • – 70% of households with income over $100K are newspaper readers
  • – 92% of 18–23-year-old adults say it is easier to read print than digital content

Most importantly, 80% of consumers acted on targeted printed mail ads, and 77% of consumers said that print drives higher levels of recall (source: Finances Online).

As you know from last week’s blog post, we are experiencing a global paper shortage. So, even if you want to launch a direct mail or print marketing campaign, can you do it? The answer is a resounding yes.

A Few Ways That Marketers Are Responding to the Global Paper Shortage:

  • – Page count and circulation fluctuations
  • – Increased use of direct mail (less paper)
  • – Clever interplay between offline and online efforts
  • – Digital natives turning to print in new ways (NTF, trigger, loyalty, and retargeting campaigns)
  • – Short and long-term adjustments to marketing cadence
  • – Willingness to try new things

What’s Next:

Traditional ad spending set to increase, which is a demand driver. After 10+ years of decreases in traditional ad spending, marketers are predicting an increase of 1.4 to 2.9% in traditional media. Traditional channels – TV, radio, and print – outperform digital channels in terms of reach, attention, and engagement, relative to costs. In fact, the top five most trusted ad formats are traditional with print advertising at 82% and direct mail at 76% (TV and radio as well) (source: MediaPost).

Tips for Smart Paper Buying:

  • – Make quick decisions
  • – Be open to grade substitutions and alternative substrates
  • – Look for the “sweet spots” such as basis weight, finish, location, and trim
  • – Improved forecasting and budgeting
  • – Level ordering
  • – Assess whether inventory programs make sense
  • – Spot vs. contract buying
  • – Maintain a sourcing strategy
  • – Pay your bills

Container prices are decreasing – specifically marginally by 0.1% to $7,625.56 per 40ft. container (source: Drewry’s composite World Container Index).

We are hopeful for a more balanced market in 2023. In the meantime, ask us about our tips for smart paper buying!-old 

paper industry

A Status Update on the Paper Industry

by Direct MailMarketing StrategyNews

Today’s paper market themes include price increases, mill allocations and late deliveries, low inventory at the mills, rising input costs (pulp, labor, energy, chemicals, freight), machine conversions, surcharges, and port congestion and container shortages.

Where We Are

  • – Global pulp prices are up 20% in the last four months. (source: RISI Fast Markets)
  • – Input costs are still on the rise.
  • – U.S. trucking market is softening slightly.

How We Got Here

  • – Pandemic
  • – Issues with supply & demand
    • Port congestion
    • Schedule reliability
    • Warehouse congestion
    • Container imbalance, congestions, and chassis shortage
    • Rail car shortage (especially in Canada)
    • Trucking challenges
  • – Rising input costs
  • – Supply chain issues

Forces Impacting Paper Logistics / Supply Chain

  • – Russian invasion of Ukraine (impact of Russian sanctions)
  • – Economic uncertainty:
    • Weakening consumer confidence
    • Inflation and rising interest rates
    • Reversal of quantitative easing
    • Phasing out of COVID-19 stimulus
  • – U.S. midterm election
  • – ILWU contract negotiations this summer
  • – Additional COVID-19 lockdowns in China
  • – Potential strikes and associated logistics congestion
  • – Energy costs

Understanding where we are and how we got here is imperative in determining how we can move forward. Stay tuned for next month’s post featuring how marketers are responding to the global paper shortage. There will be bonus tips for maximizing your brand’s success.