Agency bosses have accused Royal Mail of abusing its position to snatch away client business from them, after the company sent out a glossy mailing campaign promoting its MarketReach ‘agency’ services.
The mailpack, which heralds MarketReach as “a new media company that will help you realise the potential of mail”, has irked many in the industry.
Promoting a range of services which are in direct competition to agencies, it reads: “We are a world class team of planners, creatives, data and production people all in one place.”
But one agency boss told DecisionMarketing: “What bright spark in the ‘world class’ team of list experts thought it might be a good idea to mail direct marketing agencies offering the services of, er, a new direct marketing agency?
“Clearly Royal Mail is abusing its position as a media owner, with an overwhelming share of the domestic letterbox – even with private carriers – to set up a competing organisation.
“Who is funding this new agency? The taxpayer? The parallel would be the BBC setting up a TV agency.”
Another agency chief added: “Are they writing to my clients? Is this an abuse of their position, as they know from postage records the volume and nature of the direct mail we produce for our clients, and when we post them. Does this break confidentiality? Does the DMA sanction this?”
A third agency chief executive commented: “OK, they might only be recommending direct mail – and of course most clients want more than just that – but that’s still a major part of our business too. It makes me feel uneasy.”
As if to compound matters, Royal Mail has just poached former agency boss Jonathan Harman – who has held senior posts at WWAV, Claydon Heeley, RMG and Carlson – to spearhead MarketReach.
At the time of writing this story, Royal Mail had yet to respond to calls for a comment.
The division – unveiled in July – is at the forefront of Royal Mail’s strategy to win back marketshare from the digital channels. As well as offering creative services, the postal operator has installed a new media planning team and tools to work with brands directly or to produce white label services for agencies. It has also struck a deal with with Callcredit to provide enhanced data planning services, while a creative service will offer development and production of direct mail.
Royal Mail said it was chasing more of the UK’s £16bn advertising market with the offering, of which around 11% is currently held by direct mail.
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