|
Look around at UK advertising media at the end of Jan 2009 and its clear to see that across the spectrum its going to be a tough year. Door drops are not alone in this scenario. Press rates are falling fast, direct mail has suffered some significant response drops and even online has experienced falls. Lets not even discuss the state of TV, watch 15 mins of TV ad and you can see straight away that a lot of the traditional direct maketing advertisers have disappeared out the door. With regard to door drops the Royal Mail have just brought in price increases for door drops that take affect on bookings made from February 2009. So we are in a down turn and Royal Mail Door Drops actually increase their prices.......... Monumentally flawed / out of touch with commercial realities - you can make your own mind up on this. When we get to the end of 2009 and the Royal Mail belated realise they have lost more volume than the rest of the door drops distribution market proportionately they can reflect on this decision. That said they probabaly will have restructured, brought in new management to Royal Mail door drops and the appropriate lessons will never be learned. These above inflation price rises for Royal Mail door drops whilst ridiculous are exacerbated by UK print prices which at present are increasing at increments of up to 30% depending on grades. This is mainly down to the sterling weakness, however the UK print price has also been trading at a discount to mainland Europe for some time but these are now expected to converge according to industy sources. As a door drops practitioner this seems bizarre. Of course the euro/sterling issue is completely understandable but the rest is utterly incomprehensible. Print prices are also decided by demand and that is falling off a cliff. Whether you are in direct maiil, door drops or media inserts then we all know that volumes are on a significant slide. So where exactly is this demand to increase prices? Add to that the fact that printers are going bust every week then there is also a fair amount of paper being bought out of printers in administration on the cheap. Again where is the demand? The truth is there is what you could almost regard as a cartel of paper mills. They will be joining the Royal Mail with egg on their face at the end of 2009 unless they face up to commericial realities. Anyone that walks into our offices using the commodity/energy prices to justify paper price increases is promptly thrown out at present. That story has well and truly run its course. To be fair the best one we heard in 2008 was that paper prices always increase in an American election year....... work that one out! The bottom line is that door drops are going to have a tough time in 2009 because costs are rising across the board with no relationship to demand. The flip side will be that as volume drops response rates from door drops will inevitably increase. Early January 2009 results show that response rates have increased over January 2008 but not enough to justify the overall price increases that are imminent. So where will door drops end up in a recession period? The truth is none of us really know! However, our educated opinion is that door drops will hold its own overall with its reduction in volume being no worse than other offilne media. Had the Royal Mail and the paper mill acted commercially then we would have fared much better. The sooner the dinosaurs that are the Royal Mail and print industry wise up to the commercial realities of the 21st century perhaps we might move the game on. By the way you've had nine years.... We are fond of the Royal Mail as a national institution but their recent decisons often make you wonder whether we should just get on with it and privatise the lot. At least then we might seen some sensible business decisions. If you have an opinion of door drops in 2009 we'd love to hear it!
 |
Doordrop News 
Show/Hide comments
Show/Hide comment form