March 8, 2007

Legislative Activity

March 8, 2007

To: AAF Members

From: Clark Rector Jr., Senior Vice President – Government Affairs

Re: Do Not Mail Legislation

Following on the heels of "do not call" and "do not e-mail," another threat to marketers' communications with customers is developing in many states. "Do not mail" bills have been introduced in at least 12 states. While a number of particulars differ from state to state, the bills would ban sending commercial communications through the U.S. Postal Service.

As of this writing, legislation has been introduced in Arkansas, Colorado, Connecticut, Hawaii, Maryland, Michigan, Missouri, Montana, New York, Texas, Vermont and Washington. It is our understanding that none of these bills are likely to be enacted this year, so a concerted lobbying campaign is unnecessary at this time. However, given the apparent rise in popularity of these bills, the industry cannot afford to remain completely silent. If you have strong contacts or affiliates in any of these states, it would be worth a call to lawmakers to express incredulity that such a proposal might be seriously considered.

Please do not hesitate to contact me if you have any comments or questions.

Passage of "do not mail" legislation would be harmful to consumers, business and the Postal Service.

Harmful to Consumers

A 2005 Direct Marketing Association (DMA) survey found that 69 percent of people shop from catalogs, on the Internet, over the phone or by mail. (It is difficult to break these numbers down further because of the large amount of overlap between the media.) Nearly two-thirds of respondents cited the convenience of direct shopping. One-third appreciated the additional choice and variety, and one-third said they save money with direct shopping.

Consumers pay attention to what they receive. The 2005 U.S. Postal Service Household Diary study found that 85 percent of households usually read some or all of the advertising mail they receive.

For consumers who do not want to receive mail from a particular company, they usually just need to request to be taken off that list and request that their name not be shared with other companies.

Harmful to Business

Advertising mail is a cost-effective way for small businesses to reach local consumers.

According to a 2006 DMA economic impact study, direct mail offers a significant return on investment. In 2006, every dollar spent on catalog marketing generated an average ROI of $7.20; non-catalog direct mail generated an average ROI of $15.71.

In 2006, advertising mail contributed more than $660 billion in increased sales to the U.S. economy.

Harmful to the Postal Service

Like television, newspapers, the radio and magazines, advertising is a major source of revenue for the U.S. Postal Service.

Advertising mail provides more than half of the annual revenue the Postal Service needs to maintain its daily operations.

Without the revenue generated by advertising mail, consumers would be subjected to curtailed mail service and higher rates for individual postal customers. Reduced revenue would likely lead to loss of postal jobs and the closing of many local post offices, meaning greater inconvenience for consumers.