Mailmen ads fuel direct mail revival

Mailmen ads fuel direct mail revivalRoyal Mail MarketReach boss Jonathan Harman will be wearing a smile this morning following the publication of the postal group’s annual results which show direct mail revenue sustained its 5% growth for the full year, reaching £1.167bn in the past 12 months.
The signs were encouraging in the business division’s six-monthly update in November, which showed direct mail revenue grew by 5% to £571m in the period. It remains the shining star of the organisation, which is under financial pressure from the long-term decline in letter volumes, increased competition in parcels and its ongoing modernisation.
The direct mail revenue boost follows the launch of MarketReach Mailmen ad campaign, devised by Publicis Chemistry and designed to demonstrate the value of mail as part of an integrated strategy. Backed by its research project “The Private Life of Mail”, the initiative only launched in January but appears to be already paying dividends.
Royal Mail has also received a major shot in the arm from the roll out of Mailmark, the barcode technology and online-reporting scheme, hailed by Harman as “Google analytics for mail”.
Despite a slow start – due to mailing houses taking time to adopt the technology – over 17% of machine-readable mail currently carries the Mailmark barcode. Existing customers, including home-shopping, energy providers and high street retailers, benefit from price incentives and more accurate mailing data.
Overall, Royal Mail Group reported a rise in full-year profits, with its cost-cutting programme helping to offset flat revenues.
It reported £740m in annual adjusted operating profit before transformation costs, up 6% from a year earlier. Revenues in the year to 29 March were flat at £9.4bn.
UK parcel volumes grew by 3%, with stronger performance in the second half of the year, aided by the post-Christmas market.
Royal Mail chief executive Moya Greene said: “We have delivered operating profits in line with our expectations. Our continued focus on efficiency resulted in a better than expected UK cost performance, offsetting lower than anticipated UK parcel revenue.
“At the same time we have delivered a large number of innovations at pace as we transform our business. Our trading environment remains challenging, but we are now poised to step up the pace of change to drive efficiency, growth and innovation, while maintaining a tight focus on costs.
“At this early stage of the financial year trading is in line with our expectations, but as in previous years our performance will be weighted to the second half and will be dependent on our important Christmas period.”

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