DM Diary is Back in Action

     It's been some time since you last saw an issue of DM Diary. It's not that your name has been dropped from our contact file and it's not that the postal delivery system has fallen down once more into the bad old habits of a few years ago.

     The fact is I've been hospitalized for much of the past 10 months. The bones in my left foot and ankle deteriorated due to diabetes (Charcot Foot) and I was operated on last August after which an external fixator was screwed into my left leg and ankle to keep the re-set bones in position. (Most of the doctors wanted to amputate). That was the easy bit. While in hospital, tests showed I had developed vertebral osteomylitis (an abscess in the spine) which has the potential to be extremely dangerous. The initial operation took a full 13 hours and 18 different doctors were involved in subsequent operations and the long recovery period.

     I'm happy to report I have pretty well recovered and on the way to being able to walk again.

     Meanwhile Toti Ramos and Eva Tanglao (aided and abetted by a loyal staff) have been successfully looking after MLA's Manila office in my absence, as has Marilou Capistrano with her staff in Hong Kong and Nikki Sachdeva continues to do sterling work managing client interests in MLA's Mumbai office.

     During my absence MLA has also been able to cement an excellent collaborative arrangement with Daniel Lynn and his staff in Hong Kong/Shenzhen where we now have an established (and very competitive and reliable) printing/lettershopping/international postal infrastructure in place being used by regional and multinational mailers, and by U.S. mailers printing offshore and mailing back into the USA. This provides an effective money saving solution for large volume clients.

Newsweek Introduces New Publishing Strategy

     Like so many other periodical publishers under pressure these days, Newsweek has been forced to review its fundamental role and positioning in the market-place. They have just announced a plan to change their editorial product by providing in future more in-depth and reflective commentary and reporting on the week's international news.

     A smart move since they will be following a well established and successful model in this respect created by the Economist in its in-depth coverage of the international financial, economic and political scene. The Economist could be hard work to read if it wasn't for the idiosyncratic wit, style and character that runs through its editorial pages and delights readers. To be successful, Newsweek will need to hone and develop its own very distinctive style that will help build reader loyalty and retain it.

     Apart from creating a stronger editorial environment for blue-chip advertisers in this way, the real money saver is Newsweek's decision to allow the guaranteed circulation rate base to drop from 2.6 million to 1.5 million by the end of this year. This represents a considerable cost-saver because they will no longer need to replace the high number of marginal subscribers who expire which is one of the big costs in magazine publishing. At the same time, by increasing the subscription rate, they will retain only the best subscribers whom advertisers most want to reach - and the cost per 1000 rate base for advertisers will become lower. Good thinking by Newsweek (and good luck…).

Collaboration Between the DMA in the States and DMA's Elsewhere
Could Facilitate International Direct Marketing in the Future
as Long as People are Appointed to Make the Collaboration Actually Happen

     The idea for a "Greater China Direct Marketing Association" has been dumped since China is not interested in working with Taiwan. Instead the "China Direct Mail Association" (set up and dominated by China Post) will change its name into the "China Direct Marketing Association" and the current China DMA (which is an expatriate dominated for-profit association incorporated in Hong Kong) will become the Shanghai Direct Marketing Club (or whatever new name they choose). The Hong Kong Direct Marketing Association (HKDMA) will become a branch or division of this new China DMA.

     There will be joint events and collaboration between the CDMA and HKDMA. Gene Raitt, who is currently Chairman of the HKDMA (and will become the Chair of the U.S. DMA from next October), tells me the CDMA will also be investing quite significantly in the relationship with the US DMA which will offer advocacy, education, research, market-making and (of course) networking to U.S. direct marketers interested in entering the China market. My opinion is that direct marketers new to China should also make friends with Alex Font and others involved in the earlier CDMA which will now be changing its name. They have a lot of experience to share.

     There is current talk that China's central government is aiming to make Hong Kong a yuan offshore centre as part of their programme to gradually turn the yuan into an international currency. This may in due course make Hong Kong a feasible base from which to manage direct marketing into mainland China.

     John Greco, President of the DMA in the States, is very keen to establish closer ties with Direct Marketing Associations overseas. This has been talked about for years but things now seem to be happening. Last week there was an Arab Direct Mail & Marketing Forum in Saudi Arabia organized with only two months notice by the newly formed Arab Direct Marketing Association (ADMA) and with the US DMA, Saudi Post and the Universal Postal Union (UPU) all involved. I understand from Gene that both ADMA and the CDMA have affiliated in some way with the DMA in the States. Final details of exactly what the "affiliation" entails hasn't been announced yet.

Should Postal Administrations Introduce Summer Month Postal Rebates?

     The USPS is offering a 30% rebate to high-volume mailers in the U.S. who schedule drops during the normally slack summer period between July 1 and Sept 30. The USPS formula will base rebates offered mailers on the volumes they mail during the period this year over and above a threshold based on the volume they mailed last year between October 1, 2007 and March 31, 2008. Rebates will be credited after mailing and before December 31. Contact USPS for all the nitty-gritty details. Mailers (to be eligible for the rebate) must have dropped more than a million pieces between those earlier dates.

     National DMA's in the Northern Hemisphere and Asia should consider putting similar proposals up to possibly receptive local postal administrations in their own countries since direct mail volumes are widely known to drop significantly during summer months. Although most mailers have found that response can drop by up to 30% or so during June and July (which would make a postal discount offer of 30% a marginal benefit), I have found over the years (as have many others) that a mail drop around the third or fourth week of August, with mail actually being delivered early September before the rest of the mailer pack get out there, generates the highest average response rates of the year. Test this out for yourself if you haven't already done so.

Good Publisher Files are Declining

     It's sad to see CFO Asia and CFO China fold and become casualties of the financial meltdown. Both publications had registered and requested circulations which were meticulously maintained by their owner, the Economist. Both lists regularly generated excellent response for direct mailers and other publishers in the Asian region who were permitted to mail their files.

     Over the years ABC and BPA audited international and regional publication active subscribers have delivered by far the most reliable response rates of any list category. Why? The answer is simple really. Owners of ABC audited circulation files have little "wiggle" room in which to lie and cheat about their numbers. You might receive a few expires on top of the actives you order but on the whole you receive mostly current subscriber names which respond well because they're real and active. The rental fees may be higher, but so are your response rates.

     There are still good periodical publisher files out there but circulation numbers are declining which leads to fewer fresh names, which leads to lower volume mailings, which leads to even fewer fresh names… This is called a downward spiral.

Integrity Wins in the End

     Let's open this out a little to the more broadly based international direct mail market where "fresh names" are considered gold dust and reciprocal rental arrangements are "de rigeur". "If you rent your fresh names to me, I'll rent the same number of my fresh names to you. If you don't own fresh names with which to reciprocate, I'm not interested in renting". This makes it hard for new mailers to enter some markets.

     Recent feedback from this sector indicates response rates are currently hurting because fresh names being reciprocated are too often being diluted by older names to make up numbers and/or to maintain list rental income. Mailing hotline names at a premium places mailers wholly at the mercy of any listowner who can decide to fulfill a list order with expires padded on to actives or fresh names padded by old names. The mailer can only suspect this may have happened after response is analyzed although smart listowners will ensure the mailer receives enough fresh names for the response to be acceptable. I personally believe those who cheat the system ultimately fail. Players with integrity prevail.

The UPU and U.S. DMA Should Get Together and
Create a Major International Source of Fresh Names

     Looking ahead, where can a new source of fresh names possibly come from in the multinational market? Let's face it, compiled names these days are dead meat (at least, outside the major markets). One possible solution is for the U.S. DMA, as part of their new plans to support the international DM industry (albeit on behalf of their US members) get together with the Universal Postal Union (UPU) and their national postal administration members who collectively have a significant interest in raising direct mail volumes. Together the DMA (plus FEDMA) and the UPU can secure sponsorships to create permission based Lifestyle Databases in countries where such databases do not currently exist.

     Obviously data building specialists would need to be hired to build such databases from postal address files and then to continually refresh those databases in order for them to have a lifespan of more than 12-18 months. The database companies (under standard DMA and UPU rules and guidelines) can broker the lists locally and many international brokers (including MLA) would be more than happy to broker such lists regionally and internationally. Perhaps this can be a topic of discussion at the next meeting of the UPU's Direct Mail Advisory Board to recommend the UPU (or ask the DMA) to take some initiative in this respect.

Where Should International Direct Marketers Network These Days?

     Networking opportunities for international players have been disappearing fast. For years we used to gather at Al Goodloe's annual conference in the Harvard Club in New York. After he died no one was willing to continue the tradition. The PacNet party in London used to be a well-supported meeting point prior to the annual International Direct Marketing Fair (IDMF). This year the IDMF was closed down and PacNet bravely held their party on a Sunday 3 days prior to the Internet World show which replaced the IDMF. A lot less people turned up than normal, many key players were absent and the conversation on direct marketing issues wasn't exactly animated.

     By contrast, Pauline Murphy tells me the event she organized with Matt Edgar of Direct Marketing International in New York on March 24 attracted 80/90 players and there was valuable talk and good networking. Called the "International Direct and Interactive Marketers Forum" it was held at the same time as a "Publishing Business" conference organized by Peggy Hatch of North American Publishing Co. (publisher of Target Marketing). Each event was held on different floors but the tea and coffee breaks were shared in the same room - which was an excellent idea. Simon Burrell from Newsweek, Walt Terry from National Geographic and Bruce Rhodes from Harvard Business Publishing were amongst the luminaries who attended. Multi-channel marketing was a focus - and there was discussion on how to generate response from social networks (something we're all keen on learning more about).

     It's highly likely the event will be held again next year, so contact Pauline Murphy Office: (+442087869111) Mobile: (+447768960569) or pauline.murphy@1stopdata.com if you're interested in attending or exhibiting.

     Some people are expecting to network at DM Days in New York next month, but the general feeling in the market-place is that DMA' 09 in San Diego in October is likely to become the next venue most international direct marketers will favour for networking and exchanging ideas.