As you probably have heard, the U.S. Postal Service is in a bad way. The Senate has not bothered to vote on appointees to the USPS board. Thus, instead of usual nine governors overseeing its operations, there is just one. This is not good, what with the reports of mail increasingly being delivered more slowly and to the wrong addresses.
Especially problematic is that the agency that Ben Franklin built has been running deficits for years. Big ones. The Postal Service is supposed to be self-funding, but it’s getting harder and harder for it to maintain that status, because there is less and less mail. Less mail means less revenue. The USPS’ revenues have slid from $75 billion in 2008 to $69 billion in 2015.
U.S. mail pieces by year (billions)
Source: Data from USPS annual report. Chart by R Street Institute.
At last week’s National Postal Forum, Postmaster-General Megan Brennan told the assembled mailing-industry representatives she was going to “reinvent mail” to take advantage of the “limitless opportunities when we combine the power of mail and the ubiquity of mobile.”
On the one hand, it’s heartening to see a government agency trying to reinvent itself to better serve customers. But a closer look leaves one feeling sympathy for the PMG, who is doing what she can to play a weak hand.
First, the whole marrying of mail to mobile amounts to this: mailers now can “attach a digital offer to mail pieces and eventually packages.” In other words, say you order a bag of dogfood. It now will arrive with a code you can scan with your phone to receive a rebate or coupon for your next purchase. In exchange, of course, you are handing over useful data to the mailer: who opened what and when. Oh, and if you like, you might one day also be able to get alerts on your phone that show you your paper mail has arrived.
This is hardly a stunning reinvention of communication. Which leads to a second point: the USPS’ true customers are the mailers, not the average person. Mailers pay the USPS’ bills by paying the Postal Service to deliver. (The USPS gets less than 0.2 percent of its funding from taxpayers like you and I.) Most of what gets mailed today is not person-to-person letters and postcards. It’s mass mailings, more than half of which are advertisements.
Brennan’s reinvention strategy is an effort to lure more advertising dollars to the USPS by offering a more data-rich form of mail. At last year’s National Postal Forum, she said:
If people are opting out of commercial messages on television and radio –and they’re blocking marketing emails, and mobile ads and even some social media advertising– it’s going to be tougher for marketers to reach the end consumer. And that’s where mail has a huge advantage. Despite the fragmentation of these other marketing channels, mail will continue to be a direct, reliable pipeline to the consumer.
America should expect more paper-mail spam. Speaking of which, the USPS hopes to deliver $1 billion in campaign mail this year, much of which is sleazy half-truths. The agency has even advertised its campaign-mail site, DeliverTheWin.com, in Politico’s “Playbook.”
Upping the amount of advertising mail is an understandable strategy for the ailing USPS. But it’s not clear whether it will bring much more revenue. More advertising mail may come at a long-term cost to the USPS: the appearance of obsolescence. People already grouse about “junk mail,” and the development of mail-blocking service, like Catalog Choice, testifies to the breadth of the loathing. More advertising mail in our mailboxes may lead more Americans to see little point in having a Postal Service. “Why bother,” they may wonder, “when one can communicate person-to-person instantaneously via email, text and video chat?”
Now there’s a question the postmaster general should address.