Rise in 'junk mail' expected by Royal Mail
Royal Mail expects a rise in direct marketing - so-called “junk mail” - as it looks to increase its share of the advertising market to boost profits.
It was revealed yesterday (13 November) that half of all letters delivered by Royal Mail are marketing mail.
The increase follows the removal of a cap on volumes last year, which means postal workers are no longer restricted to delivering a maximum of three unaddressed items to each household each week. LINK
The number of unaddressed letters sent during the six months to the end of September increased to 1.6bn, up from 1.54bn in the same period last year.
The volume of traditional letters sent during the period declined 9 per cent and Royal Mail CEO Moya Greene says UK households should expect more marketing letters as the firm looks to offset the decline.
Royal Mail earned £1.1bn from marketing mailings last year.
Royal Mail launched MarketReach, its direct marketing business, in July and hopes to grow it to increase its share of the £16bn UK advertising market. Royal Mail claims that MarketReach offers £3 return on every £1 invested in mail campaigns.
The Direct Marketing Association expects companies to invest £2.43bn this year.
Chris Combemale, executive director of the DMA, says: “We see Royal Mail’s belief in advertising mail is a great growth opportunity for the industry. However, the industry must continue to improve its creative approach and use of data to ensure that direct mail remains relevant and of interest to consumers. Poor consumer insight leads to junk mail, which is bad for business. Cutting out unnecessary direct mail marketing will help to not only change consumer perceptions but also improve companies’ return on investment.”
Royal Mail posted a rise in operating profit to £144m in the six months to September 23, up from £12m in the same period a year ago. Revenue increased to £4.35bn, up from £4.21bn a year ago.
The performance has fuelled long-term speculation that Royal Mail is headed for privatisation.
The story has dominated the front page of today’s Daily Mail (14 November), with the paper warning of an “avalanche” of junk mail.