USPS Kills Nascent Car Advertising Effort p.17

By: Kelvin Childs and Mark Fitzgerald Post Office cites newspaper pressure after NAA denounced
Auto Day as a threat to newspapers

The U.S. Postal Service is aborting its Auto Day program, designed to garner direct-mail advertising from car dealers, postmaster general William J. Henderson said.
Henderson testified at a June 10 hearing in Washington before the House Committee on Government Reform and Oversight's postal subcommittee.
Auto Day was launched May 1 in Milwaukee, and was set to expand to Baltimore in July. The program committed the Postal Service to guaranteed Friday delivery of direct-mail advertising by auto dealers and sellers of related products and services, such as body shops, car washes and tire stores. The program was supported by a major advertising and marketing campaign.
Kenneth B. Allen, executive vice president and CEO of the National Newspaper Association which represents community newspapers, expressed delight. "Apparently, there's enlightened leadership over at the Postal Service. He recognized a mistake when he saw it and he decided to act quickly," Allen said about the postmaster.
Henderson acknowledged that he had heard pointed questions from many quarters, including members of Congress and, especially, the newspaper industry.
John F. Sturm, president and CEO of the Newspaper Association of America, said, "I believe that Auto Day was another Postal Service foray into direct competition with the private sector, which is not what that agency is supposed to do." NNA and NAA mobilized their memberships against the program.
To drum up interest in the pilot project, the Postal Service bought TV and radio commercials in the Milwaukee area and full-page ads in the Milwaukee Journal Sentinel. Officials did not say how much the campaign had cost, but estimates pegged the price at $2 million.

HO-HUM RECEPTION
Auto Day wasn't much of a hit with car dealers either, said Don Hansen, president of the 136-member Automobile Dealers Association of Mega Milwaukee.
"Quite frankly, I don't personally know anyone who is using it," Hansen said before the program was canceled. "I do see the ads in newspapers,
on radio and TV and they are very well done. . . .
I was kind of interested to see if it would work
out because that would be an alternative to
newspapers."
Milwaukee's two biggest dealerships, representing about 16 stores, had signed up, but Hansen was unaware of any other dealers involved.
Part of the reason may have been that the program worked best for dealers with bigger ad campaigns, said Justin Rupp, systems market analyst for the six-store Heiser dealership. Heiser was pleased with Auto Day, Rupp said.
"We did very well in a promotion last weekend with our Northbrook store," Rupp said. "The Auto Day people were great, very cooperative. They gave us a lot of support."

ICE CUBE IN DESERT
But since so few dealers actually participated, the effect on the Milwaukee Journal Sentinel was negligible, says Richard Dobson, the newspaper's senior vice president of advertising. "We haven't seen the response I'm sure [USPS] was looking for," Dobson said before the cancellation.
Allen said, "My impression of it was that it was like an ice cube in the desert. It was going to melt and go away fast."
In fact, the campaign had been so ineffective that the paper's publisher, Journal Communications Inc., never bothered to gear up a countereffort by its own direct-mail subsidiaries.
Postal Service spokesman Don Smeraldi said the test successfully raised the number of advertisers to seven, and the number of pieces mailed per week ranged between 2,000 and 50,000. He said there were no solid plans to expand the concept to other categories, such as Grocery Day for food retailers.
He said the Postal Service did benefit from the brief experiment, however. "One of the key elements of the whole thing was the Postal Service was trying to understand the implications this type of mailing would have on our operating system, and at what cost, and it appeared not to affect anything dramatically," Smeraldi said. In his testimony, Henderson said he didn't want the agency to gain at the newspaper industry's expense. "There is plenty of room for success for both the newspaper industry and the Postal Service."
Sturm said that Henderson got an earful from members of Congress about Auto Day, and "He got the message, to his credit."
"The principle here is what's important, and that's that the Postal Service should not be competing with the private sector for advertising dollars," Sturm said. "And we intend to reinforce that message whenever possible."
?(Auto Day "was another Postal Service foray into direct competition with anything dramatically," Smeraldi said.
the private sector, which is not what the agency is supposed to do.")
[ Caption]
?(? John F. Sturm, president/CEO, Newspaper Assn. of America ) [Photo & Caption]

?(Editor & Publisher Web Site:http://www. mediainfo. com)[Caption]
?(copyright: Editor & Publisher June 13, 1998) [Caption]