BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL RATE AND FEE CHANGES, 2000
Docket
No. R2000-1
REBUTTAL TESTIMONY OF S. SCOTT HARDING
ON BEHALF OF THE ASSOCIATION FOR POSTAL COMMERCE
Communications
regarding this document should be served on
Ian D. Volner
N. Frank Wiggins
Venable, Baetjer, Howard & Civiletti, LLP
1201 New York Avenue, N.W.
Suite 1000
Washington, DC 20005-3917
Dated:
August 14, 2000
1
AUTOBIOGRAPHICAL
My name
2
SKETCH
is Scott
Harding
and
I am Chairman/CEO
of Newspaper
3
Services of America (NSA). I am on the Board of Directors for the Audit Bureau
4
of Circulation
5
publishers.
6
years and spent several years managing Sears National Advertising
(ABC), a non-profit
Prior to founding
organization
that works with Advertisers
NSA, I was with Sears, Roebuck
and
and Co for 22
Group.
NSA was founded in 1991 as a company dedicated to print media services
7
a
to retail and national advertisers.
9
most efficient
and effective
including
Our mission is to provide our clients with the
print media
TMC, Advo, Penny
7800
and others.
Our
suppliers
11
client
12
retailers such as Home Depot. Included also is BMW, Toys R Us, and Walgreens
13
and many regional advertisers.
14
media and production
15
focus is not that the advertiser
16
advertisers
17
clients are competitive
the largest
retailers,
Savers
with over
10
base includes
newspapers,
buy. We negotiate
i.e. Sears and Kmart
We currently are responsible
and placed over 19 billion insertions
invest their advertising
to specialty
for over $3 billion of
into newspapers.
spend their money with newspapers,
dollars appropriately.
Our
but that
Our interest is that our
in the market place and improve sales.
ia
19
20
PURPOSE
The following
is in rebuttal to Mr. William Tye’s testimony
for the NAA.
21
The purpose of my testimony
is to present an objective opinion on the impact of
22
the proposed
print distribution,
And, specifically,
23
to dispel Mr. Tye’s testimony of a “significant shift of advertising
from newspapers
ECR pound rate and newspaper
1
to ECR mail over the last five years” and the purported
2
result of the ECR rate.
harm to newspapers
as a
3
4
5
TESTIMONY
Let me begin by stating that over 90% of the print media we place is with
So my intent
newspapers.
7
perspective.
a
method to reach customers.
9
including budget, marketing direction, customer and store locations and customer
All advertisers
10
profile of media
usage.
11
further enhance distribution
today
is to present
facts from the advertisers
6
are faced with the question
of what is the best
The media of choice is based on several factors
Newspapers
currently
provide
by reaching non-subscribers
mass distribution
and
through TMC programs.
12
13
14
MEDIA PLANNING
FROM THE CLIENT’S
PERSPECTIVE
The use of the various media options (broadcast,
15
newspaper,
16
objectives
17
feel most likely to achieve their business objectives at an efficient cost.
ia
mass mailing, etc.) is directed
out of home, direct mail,
of the individual client.
by the marketing
communications
Each utilizes the available media options they
The costs of each of these media options are weighed
against the ability
19
of the individual medium to reach the Client’s targeted customers
20
and efficiently
21
available
22
decision-making
23
presents a viable option for them includes many elements.
with the appropriate
message.
most effectively
Most Clients utilize a mix of the
media as each medium offers different core advantages.
process for most clients once they have determined
2
Thus, the
that print
1
Creative/Message
Issues
What kind of print message
2
3
standing
4
and price information?
5
objective
6
media distribution
channel.
Distribution/Carrier
Issues
is most appropriate?
inserts or FSls -- needed to communicate
Mass merchants
at an efficient cost.
Are preprints
the breadth
-- free
of assortment
often utilize FSls as they meet this
As discussed
below, FSls are used with all print
7
a
Most Clients have already established
9
10
is our job to help identify the most effective
11
address the Clients
and efficient
and standards.
media options
media objectives.
14
customers
Some formats
(hardware,
15
coverage
16
more likely to seek high coverage within this limited geographic
17
seeking “saturation”
ia
Other
from a limited geographic
client
draw
Often they limit their print media
These formats are also
area; sometimes
levels.
formats
Department
Stores)
20
objectives.
Generally
21
to their stores and accept
22
market
23
measured
they
area.
drug stores, food stores)
to 3 to 5 miles from their location.
19
area
that
business is the most impactfull element of their
13
objectives
It
objectives.
The nature of the Clients
12
media objectives
(such
as
require larger geographic
Discounter/General
Merchandise/
markets to reach their business
speaking, these clients seek higher coverage areas closer
have
lower coverage
defined
levels in the outer reaches
for an individual
customer response.
3
store,
usually
of the
based
on
1
2
3
UTILIZING A COMBINATION
We consider
OF PRINT MEDIA DISTRIBUTION
all print
distribution
4
newspaper
5
that are consistent
6
media analysis and delivering our recommendations
7
TMC products,
media
(newspaper
inserts,
distribution
carriers)
stated media objectives when completing
our
to our Client.
include a mix of the print options in our recommendations,
a
as multiple
9
utilization of the mix of print media options for our Clients has remained
10
media
Mass mailing carriers, alternate
with the Clients
We frequently
options
OPTIONS
are often
needed
to reach our Client’s
The
objectives.
relatively
stable over the past 5 years.
11
12
13
MARKETPLACE/COMPETITIVE
ISSUES
We believe that the public interest is best served by the availability
of
14
viable media options for Clients to utilize based on their unique business formats
15
and marketing communications
16
Competitive
pricing
the utilization
objectives.
is one element
of the decision
17
impacting
of one option as opposed
ia
current costing scenario
19
disadvantage
20
most clients may still chose to utilize newspapers
21
carrier, they find it expensive to supplement
22
with a mailed product alternative.
making
to another
process
alternative.
places clients that utilize larger, heavier preprints
as they seek options to most newspaper
4
insertion
costs.
The
at a
While
as their primary advertising
the newspaper’s
distribution
shortfall
Newspapers
1
have begun offering a Total Market Coverage
2
in some markets.
3
portions of their market to achieve a “saturation”
4
distributed
5
deliver their product.
6
extensive
7
mass mailing and alterrrate distribution options.
9
10
distribution.
households
within
TMCs are generally
one time per week and utilize either alternate delivery or the USPS to
“editorial”
Because
8
The TMC typically reaches non-subscriber
(TMC) product
availability
In most cases the advertising
content.
the
is not accompanied
The TMC product is a direct competitor
TMC
is developed
by the
individual
of their TMC may not coincide with the coverage
by
to other
newspaper,
objectives
the
of our
client.
11
12
13
CONCLUSION
We support
all activities
14
media options and endorse
15
field” more competitive.
16
advertising
18
that the mix of distribution
19
that if advertisers
20
via newspapers.
over the past 5 years.”
While
22
alternatives,
23
choices.
we
options has remained
client
advocates
we feel that advertisers
We believe
print
a reduced
shift of preprint
As I have stated, our experience
relatively stable.
use heavier and larger preprints, they typically
are
efficient
efforts on the part of anyone to make the “playing
We do not agree with Mr. Tye’s statement of a “significant
17
21
that offer our clients affordable,
and
remain
are best served
pound
5
has shown
This means
are distributed
objective
to
by a market
rate will give the retail
all
print
place of
industry
a
competitive
choice. Retailers
cost conscious,
are in a highly competitive
market and extremely
any action to reduce costs will give far reaching
benefits to all
consumers.
We encourage
proposed
competitive
affordable,
alternative
methods
of distribution,
lower rate will not divert advertising
alternative
and believe that the
from newspapers,
but provides
a
of media. We support all activities that offer our clients
efficient print media options and endorse efforts on the part of anyone
to make the “playing field” more competitive.
6
CERTIFICATE
OF SERVICE
I hereby certify that I have this day served the foregoing
all participants
of record in this proceeding
in accordance
rules of practice.
Ian D. Volner
document
upon
with Section 12 of the