Post Office Insensitive to Trade Publishers

When the USPS hands down its rate changes in the coming months, small publishers are going to see another large rate increase, which will widen the gap between what it costs to mail one issue of a 1,000,000+ circulation magazine and what it costs to mail one issue of a 40,000 circulation magazine. I have two problems with this decision.

1. Many B2B publishers have successfully cultivated valuable niche audiences for their advertisers. One advantage of owning such audiences is the ability to further parse those audiences into smaller segments to be able to offer advertisers targeted marketing opportunities. Taking, for instance, an audience of engineers and separating from them chemical engineers with an e-newsletter, or a special micro-site. One of the best ways of attacking those niche segments is through print, a good example being the successful spinoff, Big Builder (part of the Hanley-Wood Builder franchise). Now that postal costs for niche publications are rising, publishers will be less encouraged to use print as a means to reach these highly specialized audiences. In the era of platform agnosticism, having every possible arrow in your quiver in order to run a successful brand franchise is increasingly important.
2. One of the mandates of the USPS is to facilitate the flow of information around the country. Whereas consumer print publications help create relationships between consumers and companies that market to them, trade publications are the lifeblood of many industries. And print publications still fulfill both information-flow and marketing functions that no other mediums fulfill: true discovery (what happens when you flip through a magazine and an ad or article just catches your eye); and portability—I still don’t see too many people reading Blackberry’s on the subway. The USPS needs to take into account the essential business functions that print trade publications provide when setting rates. First class mail rates already subsidize other forms of mail (including flats). This is a precedent to have small circulation books subsidized, too.

For those of you that are members of American Business Media: David Straus, counsel for ABM, is a great resource on this issue. His email is: dstraus@thompsoncoburn.com