This comes from Tonda Rush at NNA and our own Max Heath, as NNA Postal Chair. Shared it earlier this week with publishers and circulation directors and asked them to respond to Tonda and Max so NNA and NAA (Newspaper Association of America, primarily for dailies) can mount a lobbying effort against the plan. The top part is from Tonda and talks about the background; the bottom being from Max with a request that newspapers answer the three questions. Many of you already have and if that’s the case, you don’t have to respond again. But if you didn’t respond to the first, then please do to this one. You can copy the three questions, answer them and email to firstname.lastname@example.org.
We faced a development last week that was pretty sobering. USPS has entered into a contract with Valassis under the Negotiated Service Agreement rules that signals its intention to go after newspaper advertising in a big way. This sort of deal has been stuck in the USPS pipeline for some time. We had hoped it would stay there.
The actual impact will vary by market, if the PRC allows this to go forward, but the intent is troubling across the board. USPS says in the filing it needs to do this agreement because of increasing numbers of advertisers using digital programs or newspaper TMCs that are not delivered by mail. It offers no data to support this assumption, nor any comment on how it would affect newspaper TMCS that are *in* the mail.
The NSA would give Valassis substantial postage discounts, up to 20%, for DDU and SCF entered Saturation Flat mail as part of a new program aimed at advertisers or durable and semi-durable goods that have physical retail outlets in more than 30 states. It would be a three year agreement. Valassis could implement it only in markets where it already has a presence. It would need to produce 1 million new mail pieces in the 12 month period following initiation of the contract.
Any other national saturation mailer that drops more than 400 million pieces a year into the mail would be eligible for a similar agreement. Mail South and Valpak are two that come to mind that would likely qualify.
USPS thinks it will earn $13-42 million in new “contribution” from this program,( by which it means ‘profit’ to cover overhead costs.)
Initial comments on whether the program is permissible under the NSA rules are due May 23. USPS says in its filing if this NSA is acceptable, it has other creative ideas for advertising mail for the future.
Newspaper Assn of America is tracking this as well. I am confident it intends to file comments. They have offered to pursue working with us.
Your thoughts on this, and NNA’s involvement?
Max and I have discussed this at length since the filing last week, but I want to invite him to provide his own comments directly to the board as well. Suffice to say, both of us are keenly disappointed to see this.
Please share with your members or affiliate newspapers, as the case may be, to make them aware and let us know
(1) to what degree do your newspapers have either Valassis Red Plum marriage mail insert package in their markets
(2) whether they have another such competitor, like MailSouth that could be “similarly-situated for the same price treatment, and
(3) how much of a threat to business do you consider this filing, whether there is marriage mail package in your market on Tuesday or not. If not a concern, we of course need to know that too.