Spam in a Can? Direct Mail as Information Problem

The NYT interviews Michael Critelli, head of Pitney Bowes, who disputes claims that direct (snail) mail harms the environment, annoys consumers, kills kittens, and is otherwise bad. There’s a mix of ham and spam in his claims. For example, it’s not shocking that the direct marketing industry has long been a fan of “informed consumer choice.” That’s why the federal anti-spam act is opt-out: you have to notify senders that you don’t want to receive unsolicited messages (potentially at the cost of notifying spammers that they’ve found a live address). It’s always helpful to be a skeptic when an industry’s view of the public good magically coincides with its profit motive. Note, also, the description of the Direct Marketing Association’s registry: it’s for mail preferences and lets folks avoid “a lot of the mail they don’t want to receive.” That’s a pretty lawyerly statement, no? “Choice” here means “choosing to let us know what junk mail you don’t want.” Until then, they’ll helpfully assume you’re interested in everything.

Second, the claim that shifting to e-mail marketing would harm the environment – you know, all those servers and data centers – is laughable. First, snail mail and e-mail marketing increasingly target separate market niches – the former is particularly important for folks who don’t go on-line or have slow-speed connections. Second, while spam overall constitutes a large share of e-mail traffic, the marginal increase from this shift would not significantly affect costs. (Legitimate mail gets stored more often, as long as spam filters are well-working, but spam transport requests swamp legit messages.) And the cost of spam filters is pretty low: there are free software programs, and free Webmail services such as Gmail and Hotmail do a good job. If spam constitutes 90% of e-mail traffic (put aside the software industry self-interest in that stat), then doubling legitimate e-mail would only increase traffic about 10%. Hardly burdensome.

But I do agree with Critelli about how consumers actually behave. Let’s be plain: I am the problem here. When I first moved to Michigan in 2006, I had no idea how to find a dentist. Most of the recommendations I got were in Ann Arbor, and I lived a half-hour away from there. So how did I pick someone to make me feel guilty about not flossing? I got a solicitation in the mail. The dentist was covered by my dental plan; his dental assistants were very nice; and he was up-to-date on the newest tech and research. In my case, though, direct mail spam worked. And I think my experience is typical. I may not request the catalog, but I will still order from it. Unsolicited information can be valuable to consumers, and unsolicited advertising can be effective. I’ve long argued this is the real challenge of spam: not its cost structure, not defining consent or opt-in / opt-out, but the fact that it works often enough to make spamming viable financially.

So, I’ll still recycle most of the flyers and catalogs that I get here in Brooklyn, but if someone wants to send me stuff on the latest and greatest computer parts or SCUBA gear – even unasked-for – it’s possible I’ll give it a read.

5 Responses to “Spam in a Can? Direct Mail as Information Problem”

  1. Good for you that you found a dentist. And good for the dentist that the direct mail campaign was successful.

    Many healthcare providers benefit from radius marketing. They target the neighborhoods near their offices and capitalize on the fact that neighbors talk. Healthcare professionals make good use of their advertising dollars by marketing to new neighbors, too.

  2. Hi DeeAnn – this makes sense. I don’t think that my dentist ever asked me how I located his practice – which seems important. If a provider wants to assess how to spend scarce advertising resources, it would seem to be important to get feedback in this way. (This is where spam actually has an advantage: clicking through based on an embedded URL, or opening a message with a Web bug, lets the advertiser know that the message has been effective.) Thanks for reading!

  3. lol @ “kills kittens”. They do make it seem that way sometimes. Glad you found a dentist. Direct mail can be very effective when done properly.

  4. You obviously did not read the interview carefully. Your quote that I dispute “claims that direct (snail) mail harms the environment, annoys consumers, kills kittens, and is otherwise bad” is clever, but it misstates what I said. On the point about consumer annoyance, I suggested very clearly that consumers are annoyed by low quality direct mail from companies with which they do not business and whose brand they do not trust, or which is insensitive or offensive. If you want to eliminate irrelevant, poor-quality, or offensive mail, unsolicited or not, you are doing the country and the consumer a great service. However, the public does not appear to consider the majority of the unsolicited mail it receives to fit into this category.

    You mischaracterized my environmental comment. Everything we do, including eating industrially-produced food like Big Macs, or driving to a train station, consumes environmental resources and has some negative environmental impact. Mail does not contribute to the reduction of the tree population, since trees are harvested and replanted like corn or wheat. Mail is generally recyclable, although not all of what could be recycled is being recycled. Even at today’s relatively low recycling rates, mail contributes about 2% of the municipal waste stream. The bigger question is whether what would replace mail would be better for the environment. That is unknown at this time.

  5. Two responses:

    1. Chris – thanks! Anytime I can work in an LOLCat reference, it’s a good post.

    2. Michael – thanks for reading. This is the great part of the blog world: it moves beyond static (interview / reader) to dynamic (conversation).

    To the substance: three points.

    1. 2% of the waste stream actually seems quite high: just from mail? What fraction of that is unsolicited mail? I agree that recycling rates could and should be higher. What investments is Pitney Bowes making to that end?

    2. We seem in agreement that consumers don’t like poor quality or poorly targeted direct mail. My contention is that marketers can and should do more to improve targeting – and that part of that would likely be to reduce unsolicited mail. Put another way: unsolicited mail that’s discarded without creating a sale is a net loss, not only to the advertiser and the consumer, but to society: it’s a negative externality. The waste load that it creates isn’t fully internalized, since there’s no way to charge the advertiser for the cost of waste disposal or recycling. (Indeed, consumers generally cover these costs through property taxes or local sales taxes, meaning that consumers subsidize advertisers.) In classical economic terms, this would suggest that society has an interest in reducing direct mail – perhaps we should tax it, to internalize these costs?

    3. You contend that “the public does not appear to consider the majority of the unsolicited mail it receives” as poorly targeted or not worthwhile. Could you provide some backing for this claim?

    Thanks again for reading. I suspect we disagree on some of the underlying issues here, but I’m grateful for the chance for a discussion.