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Advertising on USPS vehicles “could raise $360m a year”

Tuesday, November 29th, 2011

The US Postal Service could be making more than $360m a year in extra revenue by using its vehicles as a platform for advertising.

That is the claim of Denver-based Light Promotions, Inc., (LPI) a company that has been running a pilot on-vehicle advertising project for USPS since June 2009.

Struggling USPS has been looking for various ways to bring in more revenues as part of its efforts to restore financial stability in the light of accelerated mail volume declines this year.

Using its extensive vehicle fleet to host advertising has been one idea included within postal reforms currently proposed by the US House of Representatives.

The pilot project has involved advertising on trucks used by independent contractors for ferrying mail between USPS sorting plants, and would not require Congress to change the law for expansion nationwide.

However, LPI chief executive Daniel Goter told Post&Parcel today that what a legislative change could do is open access to the 185,000 USPS-owned mail delivery vehicles for advertising, which would bring in hundreds of millions in extra revenue.

A full roll-out to a total of around 200,000 postal vehicles would most likely take two to three years to achieve, including regulatory clearances, he suggested.

Goter said: “We think it becomes a win-win situation, because this allows you to take a step forward in dealing with those financial issues without cutting staff and without cutting service.”

Pilot

LPI said the pilot project is still ongoing within 11 Western and Midwestern states, and that expanding it nationwide could see advertising on as many as 17,000 trucks. Goter said USPS executives are now actively considering rolling it out to transportation routes across the nation, but a USPS spokesman could not confirm this to Post&Parcel.

Goter said the project had so far proven that there were “plenty” of advertisers interested in making use of Postal vehicles for their campaigns, and had found a price point at which advertisers were willing to commit.

Advertisers particularly like the prospects of postal vehicles because they can be used particularly well to target specific locations and demographic groups, he said.

“The great thing about the Postal Service fleet is it is reliable,” said Goter. “It runs on time, it runs 6 days a week, it runs on particular routes – you know exactly where this vehicle is going to be. That has been the downfall of other types of mobile advertising, but we can overcome that with the Postal Service fleet.”

The LPI advertising system, which uses lighted displays, means the advertising is effective in low light levels, allowing the targeting of nighttime drivers and commuters, a key demographic for advertisers.

The LPI chief executive said the only potential downside to the advertising was the possibility of damaging the USPS brand with inappropriate advertising, but while LPI sells the advertising, USPS had full control over the advertisers and messages displayed on vehicles.

However, Goter said there was no shortage of appropriate advertisers out there in the $8bn-a-year US outdoor advertising market.

Public campaigns

A segment of the market with particular potential would be government and state agencies, who can use USPS vehicles to target key groups within multi-million dollar publicity campaigns. Potentially, it could see hundreds of millions in federal grants for state campaigns recycled to the Postal Service each year.

The Nebraska Office of Highway Safety is one state agency that has been making use of the platform for its “Driver Sober” campaign since the start of the holiday season, a campaign aimed at reducing drunk driving.

Administrator Fred Zwonechek said the Office of Highway Safety had been using on-truck advertising for its campaigns for three years, but the use of postal vehicles has been particularly attractive for the ability to target specific areas where alcohol-related traffic incidents are more prevalent.

“There have been signs on buses for a long time,” he said. “Lighted Promotions is a new venture for us that, using lighted boards, allows us to target at night. They’ve arranged to use postal vehicles in the Omaha Metro area – it’s where there are the largest number of alcohol-related crashes, where the most drunk drivers are arrested.”

Zwonechek said using the postal vehicles in December would mean more exposure for the campaign in areas it may not have previously reached, particularly with the rise in postal volumes because of the run-up to Christmas.

As an advertiser, he said using postal vehicles was just as effective as other forms of advertising used for the campaign, and that if delivery vehicles were included, advertisers would be able to target particular neighbourhoods, offering daily exposure for appropriate campaigns.

“It’s a creative way to try to reach people,” he said. “I’m certainly going to encourage my colleagues in other states to explore the same possibility of using these particular vehicles.”

Commenting on the prospect of advertising on USPS vehicles, Postal Service spokesman Dave Partenheimer said: “While there seems to be an opportunity for revenue generation through an advertisement initiative, there are some challenges, including controlling how advertisements may impact the Postal Service brand, one of our greatest assets.”

Partenheimer stressed that USPS does not have any of its own vehicles involved in advertising, and no contract to roll out an advertising programme.

Source: James Cartledge, Post&Parcel

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