Junk Mail Juggernaut

"Direct Mail: The Real Threat to Newspapers" by John Morton, in American Journalism Review (Nov. 1996), 8701 Adelphi Rd., Adelphi, Md. 20783–1716.

The rise of the Internet and its endless electronic offerings has partisans of newspapers deeply alarmed. Morton, a newspaper analyst with a brokerage firm, says that they ought to worry instead about a far more mundane threat: junk mail.

Encouraged by the U.S. Postal Service, Morton contends, direct mailers have sapped desperately needed advertising revenues from newspaper publishers and forced them into costly battles that divert them from their main mission. Ten years ago, newspapers claimed nearly 27 percent of all advertising revenues, while direct mail received 16 percent. By 1995, however, newspapers’ share had dropped to 22.4 percent, while the direct mail take grew to 20.4 percent.

Morton traces the rise of junk mail to the transformation of the U.S. Postal Service into a quasi-independent agency during the 1970s. At first, a revenue-hungry Postal Service increased the third-class postal rates paid by direct mailers. Many advertisers fled to newspaper publishers, who could deliver the advertisers’ full-color brochures and coupons with the morning paper. Realizing its mistake, the Postal Service reversed course, not only trimming rates but allowing mailers to put several circulars in one package. A junk mail boom was born.

Now, says Morton, legislation is pending in Congress that would allow the Postal Service to offer even deeper discounts to high-volume mailers while raising first-class postal rates. The newspaper industry charges that first-class mail, while accounting for only 54 percent of the Postal Service’s volume, already pays 70 percent of the service’s costs. Letting the Postal Service have its way, in this view, would be tantamount to meddling in the marketplace. But even if the legislation does not pass, says Morton, junk mail will remain a far bigger threat to newspapers than anything cyberspace may have to offer.