Why Mail Matters: Google Needs it To Sell On-line Advertising

 Heigi Toliver-Nigro in a post in the Digital Nirvana Newsletter provides another example as to why mail continues to thrive as an advertising media.   Google needs it to reach potential customers for its ad words and other on-line advertising services.

“If print is dead,” said Andrew Davis, owner of Tippingpoint Labs in his presentation “Positioning Print for Today’s Customer” (from which these examples were taken), “then why are Google and Yahoo! using direct mail to promote Internet search?”

Good point. As I sat in the presentation, I thought about the multiple direct mail pieces sitting on my own kitchen counter at home. They were from Google, with integrated cards inviting me to expand my AdWords account. Haven’t gotten anything from Yahoo! yet, but it’s probably a matter of time.
When I got home from the trip, I was going through my mail and I had to smile and think of Andrew. Yet another direct mail solicitation from Google.

Have you gotten direct mail from Google lately? If so, what does this say about the viability of print?


I have to say that I get Google's direct mail.  In fact, I think I have been getting a piece from Google nearly monthly.  I thank Ms. Toliver-Nigro for pointing me to an example out the importance of mail in a digital world that was just under my nose.

Good News in Print Consumables: Good News for the USPS?

In its First Quarter 2011 earnings announcement, Presstek, a manufacturer of printing equipment that serves the needs of shorter run printers, just provided the Postal Service another indication that improvement in advertising mail revenue may have legs.  

The positive indication came from the growth of consumables used on installed Presstek equipment.  In the press release, Presstek Chairman, President and Chief Executive Officer Jeff Jacobson stated, "The sale of consumables accelerated during the latter part of the quarter, providing us with our highest quarterly total revenue performance in four quarters."  In the conference call he indicated that the growth in consumable sales has continued through April and the first week in May.

Presstek is even seeing improvements in its equipment sales.  Mr Jacobson said,""In addition, we have seen an increased level of equipment sales activity during the early part of the second quarter of 2011, and expect to report both sequential and year-over-year equipment revenue growth for the quarter."  The growth in the sale of printers indicates that printers have begun to feel sufficiently confident in their business to begin making significant capital investments.

Presstek's conference call included a note of caution regarding the growth of mail printed by smaller printers.   Presstek noted that  finding capital remains a business impediment for smaller printers.   These companies are more reliant on bank loans and bank lending remains tight.

Macroeconomics and the Mailing Industry

The mailing industry is an industry that depends on strong consumer demand.   Whether we are talking about transactions paid through the mail, advertising, or parcel delivery, mail volume will rise or fall depending on consumer demand.   The industry will likely prosper if consumer demand grows and will face even more challenges than it does now if consumer demand falls.  That is why the current debate regarding fiscal policy and the macroeconomic effects of that debate fiscal policy is so important to the industry. 

A recent article in the National Journal nicely summarizes the opposing viewpoints as expressed by the Joint Economic Committee Republicans and the Federal Reserve Chairman  Benjamin Bernanke and a number of economists including Chad Stone of The Center on Budget and Policy Priorities.  

When I first read the Joint Economic Committee Republican report, I was struck by one prescription that the National Journal summarizes as follows:   "The paper predicts that cutting the number of public employees would send highly skilled workers job hunting in the private sector, which in turn would lead to lower labor costs and increased employment. But “lowering labor costs” is economist-speak for lowering wages." Cutting the wages of college educated Americans did not seem like a good way to increase the demand for the products and services that are advertised or delivered by mail especially as the customers of the mailing industry are facing higher fuel and food costs to begin with.

As the National Journal article concludes, "Ultimately, the argument comes down to what policymakers see as the key problem in the economy. Is growth slow because businesses and consumers fear higher taxes or because businesses don’t have enough demand for their products to expand? Republicans are arguing the former, but many economists — and the bond market — believe the latter is closer to the truth. Moody’s bond-rating agency warned on Thursday that the U.K. is in danger of having its debt downgraded due to worries about slow growth resulting from consolidation."


This is not a debate that the mailing industry would normally get involved in.   However, it may be worth the time of industry firms to spend a little time thinking about a very complex economic issue to make sure that Congress chooses the economic approach that best aligns with the industry's interests.  It is my opinion that the industry would be better served by an economic approach supported by the bond market than one developed by politicians.

Can the Postal Service Do Direct Mail for Itself?

In order to promote its buy stamps by mail program, the Postal Service sent out a direct mail piece promoting its holiday stamps.   Only problem with the mailing is that it arrived too late for customers to order by mail or internet and receive the holiday stamps before the deadline for mailing Christmas cards passed.

While buying stamps by mail may be a great program, this mailing was a waste of money in the same way that advertising that arrives after a sale (or an election)  is a waste.  When this happens to an advertising mailer every vendor from the advertising agency to the printer to the Postal Service is challenged to find out why the mailing did not arrive in time to have the appropriate impact.  If there is evidence that the Postal Service did not meet its obligation, especially in the case of political mail, there are usually news stories that get picked up by many national media outlets.  

The marketing office that paid for the mailing should find out where the failure in the mailing process occurred.    Finding out why the mailing arrived late, and how Postal Service operations may have caused the late delivery, might help Postal management understand how service needs to improve to ensure that advertising mail remains a competitive mode for delivering advertising.