Priority Mail

This is the first installment in Adweek's new effort to present regular case studies on individual client's media strategies. We will investigate not only what advertising works, but what doesn't. Rod DeVar must make a staid medium like snail mail relevant in a post- modern communication age without harming a brand built on the emo- tional connection people have to what arrives in their mailbox every day.The advertising manager for the United States Postal Service can't forget his employer's core mission, which is to deliver mail. But if he hopes to increase revenue and stay ahead of chief competitors like FedEx and UPS, he can't afford to ignore the plethora of new media that are changing the way marketers communicate with their customers."The Internet was reported to be the death knell of the post office, but that has not been the case," DeVar says. "Mail is our business and it will always be our business, but we have learned that the Internet is our friend, too."While profits from first-class mail, part of the nearly $67 billion in sales the Postal Service made last year, were down 1 percent from 2004, centering a communication strategy around driving traffic to the Web has paid off with revenue from the shipment of packages from its online "click and ship" program increasing 2.8 percent last year to $8.6 billion.The StrategyDeVar has hardly abandoned established media in his quest to boost sales. The "Access" campaign done by Campbell-Ewald in Warren, Mich., includes TV, print, radio and Web ads. But through that same campaign, DeVar has also experimented with emerging media that include Web-based podcasts, video-on-demand, mobile/wireless text messaging and satellite radio. And starting in the fall, the USPS will try RSS (Really Simple Syndication) feeds to boost the circulation of one of its print publications.While the USPS is not ready to bet substantial sums on new communication vehicles, it has been willing to devote 3 percent of a $70 million media budget to it—what DeVar calls a "calculated risk." The emphasis is on calculated, and the results have been mixed and surprising. "The two things we pay attention to are accountability and experimentation because clients are demanding both," says Ed Dilworth, Campbell-Ewald's evp in charge of new media. "The Postal Service is not one of those customers you would think would be innovative, but in fact, it is. And it can take advantage of the transition in media to use the emerging forms to say something about its brand."The USPS focuses its communication strategy on two targets—small business owners and residential customers during the year-end holiday season. Dilworth and Mark Bellissimo, Campbell-Ewald's evp and account director, equate determining the right media mix with the calculations done by financial advisors to create investment portfolios. "We take a test of our client's taste for risk, which includes a balance of what has worked well in the past like direct mail, and then try new things like the international penny stocks," Dilworth says.The Campbell-Ewald execs built their strategy of what new media to add based on the notion of surround sound. They knew from research that the work life of a small business owner revolves around a computer. So it made sense to not only try media that fed off the Web, like online radio and podcasting, but to also experiment with objects in reach of a computer, like coffee cup sleeves and pizza box covers to create that surround sound effect.What WorkedA 3 percent emerging media budget might not seem like a lot, but DeVar knows he must move cautiously because USPS research shows that even people as young as 12—the so-called Gen-Yers—report liking and responding to what shows up in their mailbox. The USPS calls the phenomenon the "mail moment," when people favorably anticipate the surprises that will come in the mail that day. That brand connection helps explain one surprising twist the USPS learned in its quest to remain relevant. At a time when channeling messages across multimedia platforms is considered de rigueur, an old workhorse—in the form of a simple direct-mail postcard—has been a big hit. The "Keeping You Posted" cards, which provide tips about several USPS services including online products, are credited with building a 28 percent increase in brand awareness since the USPS started sending them to customers in February. The marketing lesson learned is that total change is not necessary.Not every experiment matched their expectations. With online radio, Dilworth says they went into it thinking it would be a good way to build brand awareness, but it turned out to be a "great direct-response medium" for the USPS's carrier pick-up service, yielding 350,000 click-throughs to the USPS smart business Web page. The technique involved placing a USPS icon on the computer screen that viewers would see as the radio ad played. Small business owners would hear the voice of actor Harry Shearer saying, "Why, at this very moment, you've converted your computer into the world's most expensive radio. But do you know what else you could be doing on your computer? Going to the post office." He then directs listeners to click on a blue banner to access the services.The on-screen icons are the key. As DeVar puts it, "Doing a radio ad that tells somebody to remember a phone number or Web address doesn't work that well." Since January, the USPS has purchased banner ad units on a downloadable service similar to a podcast that runs on smart mobile phones. By clicking on a banner on the cell phone or smart phone, consumers receive an e-mail through which they can download a USPS software program called "My Desktop Post Office." The results have yielded 166,000 click-throughs, with 14,000 people actually downloading the service. Such metrics have been deemed "not bad" by Bellissimo and Dilworth, with the USPS considering the prospects for including mobile text messaging into the 2007 media plan as "favorable."What Didn't WorkThe USPS has had less success with podcasting, which turned out to be one of those riskier international penny stocks that hasn't quite paid off. First, it sponsored time on podcasts on entrepreneur.com and CNN.com. The entrepreneur.com podcast featured a Ross Perot editorial, which received 164 downloads—a snooze as far as DeVar and the Campbell-Ewald execs are concerned. The podcast on CNN.com did better with 130,000 downloads.The results have been mixed. Bellissimo and Dilworth say they will not abandon podcasting entirely in next year's media mix, but they have yet to determine how much it's worth. "I don't think podcasting has caught on yet," Dilworth says. "In this case, it's a volume issue. You are always hoping for some kind of home run and it doesn't feel that way yet.""But we haven't abandoned it entirely," Bellissimo adds. The USPS also created two podcasts of its own to promote commemorative stamps on child healthcare and the civil rights movement, and advertised the material on its Web site. The podcasts, which were under three minutes in length and were listed under U.S. Postal Service/"stamps," drew more interest from reporters than stamp buyers and garnered only 36 and 187 downloads, respectively. Joanne Veto, the USPS rep who created the podcasts, thinks it would have been better to promote the material under a category with a larger reach than just stamps. "Had we picked a [category] broader in appeal—like the civil rights movement—we may have had better results," she said, adding that the podcasts' short length also hurt. "If someone is going to take the time to download a report, they want to make sure it's worth their time and effort," she said. "Listening to something for one minute at your desk is quicker than downloading it for later."Although the USPS spent no additional money creating the podcasts, the number of downloads doesn't justify trying it again, Veto says.To maintain a constant dialogue with small business owners, the USPS turned to video on demand, with some disappointing results. As part of a three-prong strategy that includes a custom-published magazine called Impact and an e-mail newsletter, the content the USPS developed for video on demand focused on topics that would help small businesses grow, which include advice on handling finances or how to find the best employee. DeVar has gathered footage from nearly 60 small businesses to create 13 half-hour programs that are sprinkled with one-minute tips about the USPS.DeVar's vision was to present his programming to cable companies gratis in return for their airing it free of charge. He said his idea was at first received warmly by cable companies such as Comcast. But then things started to change. The USPS is being asked to pay to run the programming or remove its one-minute branding messages, DeVar says.DeVar says he learned two things from this experience. First, there is no clean definition of what content constitutes VOD. "When you talk to these companies, they are making it up as they go along," he says. Second, DeVar says the next time he negotiates a VOD deal he will leave his agency media planners back at the office. He says their presence gave the impression that the USPS intended to pay.Just how commercial sounding the video content should be is still more a "matter of art than science," DeVar says. "We want some of the content to talk about mail, but we have been very careful so it doesn't look like we are plopping a 30-second commercial into the middle of the program." He argues that other video programs are much more commercially explicit.The USPS has run VOD programming on Comcast's Success Television, AOL.com and Inc.com. Although it has not paid to run the videos, DeVar says such conversations are continuing. But given the tone so far, DeVar says that this category is not likely to "grow up to be a major strategy for us." He predicts that the USPS Web site will likely become the final destination for the content.Helen Whelan, CEO and co-founder of Success Television, which stopped running the videos last month, says the agreement was that she would run the material in return for the USPS promoting it by buying time on local cable networks and advertising it in post offices. But the USPS didn't promote it, she says. "We thought the Postal Service videos were great in terms of content, but how can you think you are going to be successful if you put content up without promoting it," she says. DeVar says the USPS had a similar experience with XM Radio, which touts itself as "commercial-free radio." Last December, it paid to sponsor a holiday music segment by airing a 10-second brand message reminding listeners that "free carrier pickup of all your postage-paid holiday packages is available at usps.com." It has since been told that it can't do that again this year unless messages directing audiences to the site are removed. "If we can't drive people to a Web site, there is no point," he says.What's Next?The USPS will try out RSS feeds to augment its print publication called Deliver, which launched in February 2005 and is directed at marketers. The endeavor comes with its own risks. RSS feeds by definition are for Internet-savvy consumers who want instant news on their preferred topic without having to search through endless Web sites. Constantly changing Web sites stand to benefit the most from RSS feeds, but usps.com doesn't change often enough to make the feeds worthwhile. And, as Veto notes, "our podcasting experience tells us that people are not very likely to ask the Internet to send them everything new and exciting about the Postal Service." So a decision was made to base the feed content on material from Deliver, which has featured marketing stories about American Airlines, American Express and the U.S. Army, among others. USPS execs hope the feed, which will debut in January as part of a revamped Web site, will increase Deliver's circulation.Going forward, DeVar knows he doesn't want to lose the positive association people have with their mailbox. After all, if people wanted to eliminate items from their mailboxes like catalogs, they could do so by only shopping online. But USPS research shows that people want both the print catalog and the ability to shop online. The two methods complement each other.That's how DeVar thinks new media should be addressed, with the newer communication vehicles complementing and extending the reach of existing methods. "We can't lose sight of what our core business is about," he says. "But we can't just ignore the Internet as a media channel. We do know that if we don't stay relevant, we will lose people."

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