Royal Mail Launch Advertising Mail in May 2011. This discount scheme for advertising mail is due to be rolled out to retail customers while improving the existing offering to wholesale customers such as DSA’s. What effect will this have on direct marketing in the UK?

Royal Mail’s Advertising Mail will offer postal discounts for “100% advertising mail” that falls into letter and large letter format.  Due to the “100% advertising” stipulation transactional and transpromo mailings will not qualify for the discount. With the potential increase of up to 19% in postage prices for the larger transactional mail users this attempt to placate the DM market seems to be somewhat “self defeating”. It is likely to drive transactional mailers increasingly to online forms of contact with resulting fall off in overall mail volumes.

In the current climate of fragile economic conditions in the UK it will be interesting to see how these price changes will impact the Direct Marketing industry.  Even with the launch of Advertising Mail it will be difficult to see how the Royal Mail will be able to escape the flip side of the big price hikes that are due in May. These are certain to reduce mailing volumes overall in the industry.

Advertising Mail will probably be popular due to the fact that it will offer a saving on postage after the increase comes into effect in May 2011 for certain types of mailing. It certainly looks like the Royal Mail are trying to increase their market share amongst catalogue mailers, which has been reduced with the advent of competition and the Down Stream Access (DSA’s) providers. Royal Mail is also increasing the price for these wholesalers, which will reduce the competitive advantage the DSA’s have enjoyed over recent years.