September 6, 2016 (RARC-WP-16-016)
- The Digital Age transformed the way many businesses advertise, and while mail has maintained its market share thus far, the Postal Service should innovate to remain a competitive advertising medium.
- The OIG identified two opportunities for the Postal Service to modernize its advertising mail offerings: integrating digital technologies with advertising mail and developing online platforms for small businesses.
- By meeting the new digital wave head-on, the Postal Service can enhance the value of the advertising mail channel and attract new mailers to use the Postal Service for their advertising needs.
In the age of the Internet, smartphones, and reduced advertising budgets, businesses have shifted the amount spent on traditional advertising channels, like radio and mail, to more digital advertising channels. This shift in advertising spending has allowed businesses to market to digitally-connected consumers more quickly and less expensively. Consequently, over the past 20 years, the amount spent advertising through digital channels has grown from zero percent to 30 percent of all advertising spending.
In the midst of this digital advertising revolution, advertising mail has suprisingly held its own — keeping a steady 10 to 12 percent share of the advertising market over the same timespan. However, as the world becomes more technologically advanced, the Postal Service cannot assume its position in the advertising market will continue forever.
To maintain relevancy in this increasingly digital world, our paper, Advertising Mail Innovations, looks at two ways the Postal Service can innovate its advertising mail offerings:
- Continue integrating digital technologies with advertising mail; and
- Develop platforms to simplify the mailing process for small businesses.
By employing these innovations, the Postal Service and its partners can enhance the value of the entire mail chain by increasing advertising mail's relevancy to recipients and attracting new mailers, like digital-first advertisers and small businesses.