1. Address systems play a dual role of improving postal network operations and enabling direct mail advertising and commerce. Validated addresses reduce undeliverable mail and increase the lifespan of addresses. 2. The value of accurate addresses is increasing as more stakeholders rely on address data and the costs of failed deliveries rise. Direct mail also drives address value through increased customer data integration and personalized marketing. 3. Direct mail represents a significant economic activity, generating billions annually in revenues. Response rates have increased with new technologies allowing more targeted messaging through integrated customer data and addresses.

1. Address Systems and
the Future of the Mail
Bernard Markowicz, Ph.D
Mexico City
February 2011
1

2. The Dual Role of Address Systems
Improve
Network Enable Direct
ADDRESS
& Delivery SYSTEM
Advertising Mail &
Operations Mailing Industry
• Improved addressing by customers • Increase delivery confidence
• Improved delivery • Build direct mail industry
• Improved mail sorting & staging • Develop intellectual capital / revenue
• Delivery point sequencing • Work sharing
• Change of address redirecting • Intelligent mail & future applications
Results: Improved communications and trade
2

3. The Value of a Valid Postal Address
is Increasing
Traditional value of standard, validated address:
Reduce the number of “undeliverable as addressed” (UAA)
Minimize cost of redirected, destroyed mail
Enhance the average lifespan of an address (mobile society)
Multiplicity of stakeholders increases the value of addresses:
Increasing number of stakeholders: Cadaster, emergency management, e-gov,
utilities.
Increasing cost of failed postal processes (delivery, cross border returns),
Integrated customer knowledge:
Commerce (direct mail) is driving the value trend
Drive to increase response rate (from 1% to 5%) through information
integration, analytics.
3

4. Direct Mail Development
Around the World
Source: UPU Direct Mail Advisory Board
4

5. Direct Mail Represents a
Significant Economic Force
United States Canada
Addressed Mail Pieces; per
602 133
household (2009)
Direct mail
Postage Generated; per
household (2009)
$126.65(1) $124.79(2) spending will
Spend on Direct Mail grow 5.8% to
Advertising per household, $351/y $195/y $47.8 billion in
excluding postage (2007)
the U.S. in 2011
Total revenues generated
$5 595/y(3) $3 753/y(3)
from Direct Mail Advertising
(1) USPS Avg rate per piece = $0.21 (2) CPC Avg rate per piece = $0.94 (3) ROI = $11.73 of revenue per $1 spent; DMA 2009
5

6. The value of a single address in
emerging economies is significant
Sales Generated 3 Year NPV @8%
Yearly
$6,000.00 USA
Per Estimated Address
$5,000.00 Canada Capita HH sales NPV
Sales per HH Income (3 years)
$4,000.00
Sales per Capita $5 000 $400 $1 030
$3,000.00
$10 000 $900 $2 300
$2,000.00
$15 000 $1 475 $3 800
$1,000.00
$20 000 $2 100 $5 440
$0.00 $25 000 $2 800 $7 200
$0 $10,000 $20,000 $30,000 $40,000 $50,000
Yearly Income
Per Capita
Estimated Yearly Sales Generated by Direct Mail
(per Capita and per Household)
6

7. Developments in Direct Addressed
Mail Increase Response Rate
Enhanced Response
Technologies Rates (%)
Variable data color digital Dynamic Color w/Coupon &
16.5
History
printing Dynamic Color w/Purchase 6.5
Data mining and profiling History
B&W Dynamic w/Purchase 2.5
Internet, online, web, e-mail History
Mobile devices Color Name-Only
2
CD/DVD formats Full-Color Static
1.5
Digital Photography B&W Name-Only
1.5
Trans-Promo 1
B&W, Static
0
5
10
15
20
7

8. Information Integration and Address
Systems Improve Response Rates
george@yahoo.com
gbrown@hotmail.com
geb@gmail.com
Online Purchases
From 1% to 5% Store Purchase
Response Rate
12045 Oak Valley Rd
Manassas, VA 20108
Per Buyer Without Catalog With Catalog
Dollars $224 $260
Sales 1.3 1.5
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9. Trends in Information Integration
Info to be integrated with address
Marital status & age
Lifestyle information such as hobbies and past product purchases
Home value & household income
Language spoken in the household.
Mailers (and customers) want:
More targeted and personal messages
Capitalize on the “mail moment”
Customized coupons and mini-websites based on purchasing data
Integration of email, phone and mail (catalog) (QR Code, Intelligent Mail)
Tracking & measurement (Intelligent Mail)
Wider sale territory
9

10. Postal Operators & Governments
Must Tap into the Direct Mail
Commerce Potential
1 2
Encourage public-private
discussions through industry Change of
Address
Address
dialogue Validation
Service
Provide address validation &
change of address services
Encourage strong customer
privacy & preference opt-in Strong Industry –
Privacy Postal
Adopt a “pro-commerce” Oversight Forum
stance
3 4
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