Like a recluse who decides they have to get out more, the UK’s third-largest media owner has just put on its party frock and hit the town, writes Dominic Mills.
You’re probably as surprised as I am to discover the identity of the UK’s third-largest media owner by advertising revenues. It’s…drum roll…the Royal Mail.
Yes, after Google (£3.38bn) and ITV (£1.9bn), third place goes to Royal Mail (£1.1bn)*. Bigger, in ad revenue terms, than Sky, the Daily Mail Group or Channel 4, it claims.
I only know this because last week saw an attempt by Royal Mail to put itself on the media map, with the launch of its new ‘Mailmen’ campaign by Publicis Chemistry. It features, among others, endorsements by Karen Blackett of MediaCom and Robert Senior, worldwide boss of Saatchi & Saatchi, chosen, presumably, because a) they are influencers and b) because they are not the kind of people you would normally associate with mail media – a bit like the Archbishop of Canterbury lending his name to a Barclays campaign.
Of course, this ‘we’re-bigger-than-you-think’ claim depends on how you define advertising revenues, but in Royal Mail’s case it’s pretty straightforward: by value of the stamps sold for marketing mail (i.e. excluding personal letters and parcels).
Who knew, eh? The problem is that Royal Mail certainly doesn’t behave like it’s a major media player or engage regularly with the media scene.
Every major media owner has, or should have, a ‘rockstar’ sales figurehead who is the face to agencies and clients alike: ‘Daggers’, ‘Bammo’, Mark Howe, Rosemary Gorman, Dominic Carter; can you name the Royal Mail’s? I bet it doesn’t even think like that.
In my memory, this is the third or fourth time over the last 15-20 years that Royal Mail has made a serious attempt to put its media cards on the table.
But for some reason, its efforts to act like a proper media owner are inconsistent. My guess is that this is because, unlike the likes of ITV or Google, media is only a small portion of its £7.8bn business – about 15%, to be more accurate.
So, not only is the media part dwarfed by the rest of Royal Mail’s business, it’s also that the senior management has other pressing issues to deal with: in Royal Mail’s case, a complicated mish-mash of deregulation (allowing in competitors), regulation (maintaining the universal service, pricing), dealing with government and the unions, and flotation.
Not surprisingly then, the media part – known as Marketreach – doesn’t always get the love and attention (and investment) from its parent that it needs to compete.
The trouble is with this hot-and-cold approach is that, in media especially, the game moves on. So, not only does Marketreach have to convince a new generation of influencers (i.e. clients, media agency planners, creatives) of the virtues of mail, but it also has to figure out mail’s place in the ever-changing media eco-system. Which of course is very different from the last time it relaunched its mail media services.
The best analogy I can come up with is this: Royal Mail is like someone who, every three or four years, decides they have to get out more. So they pluck up the courage, put on their party frocks, and attend all the best parties. But when they get there, they don’t know anyone, and stand nervously round the edge holding their drinks and looking for someone to talk to.
But they shouldn’t be, because Royal Mail actually has a lot of interesting, relevant things to say – especially, and counter-intuitively, to the digital-everything crowd.
I can’t go into it all, but you can go to this Mailmen website and download the report titled The Private Life of Mail, essentially a study into our relationship with mail, how we feel about it, and how it influences us.
It’s a proper, hefty and – I think – illuminating piece of work, evidence that Royal Mail wants to be taken seriously as a media owner.
Among other things, it says:
– Households keep advertising mail for an average of 17 days, and 38 days for door drops
– A physical, tangible, offer (i.e. mail) has more perceived value than a virtual one (i.e. email), and 38% say the physical properties of mail (quality of envelope, production values and so on) influence their view of the sender
– Nearly six out of ten (57%) of consumers say receiving mail makes them feel more valued
– Mail works with other media: campaigns including mail are 27% more likely to deliver top-ranking sales performance, and 40% more likely to deliver to-ranking acquisition levels
– According to the IPA TouchPoints, people read mail for 22 minutes a day on average, versus 14 minutes for magazines
Will any of this make a difference to Royal Mail’s fortunes as a media owner? I think it will: you need a mix of the emotional and rational, and there’s enough of both with which to engage the head and the hearts of even the most hardened media planners and marketing directors.
But it’s equally important that Royal Mail behaves like a pukka, scaled-up, media owner. That means being part of the media community on a permanent basis, not in one minute and out the next. It means an ongoing and high-level commitment to research (note to parent company board: that’s the price of being a media owner).
And, hey, it may even mean hiring a rockstar or two.
Instant fame does not equal long-term success
It’s a fair bet that the 15 first-time advertisers who coughed up $4m for a 30-second spot in last night’s Super Bowl will achieve instant fame.
For many, this represents a huge chunk of their ad budget, and is thus the equivalent of betting everything on red – albeit with much lower chances of success.
Among them: the makers of a mobile game called Heroes Charge; a Mexican avocado co-operative, a glue called Loctite, and my favourite, a fungal toenail cure called Jublia.
The Mexican avocado ad is actually quite funny, and then completely spoilt when (50 seconds in) the ad explains that Mexico’s volcanic soil makes it perfect for avocados. You just know what’s happened: the client has had a total meltdown: “OMG, we’re spending $4m, we’ve got to explain why our avocados are better than California’s.” As if anyone cares, or will remember.
This may or may not be the right Jublia fungal toenail ad; either way, though, about half the time will have been taken up by listing the side-effects, which include ‘itching, swelling, burning, blisters and pain’. Possibly memorable, but for the wrong reasons.
The instant fame, however, conveyed by the Super Bowl is worth nothing if it doesn’t last. If you’ve blown most of your budget on one Super Bowl ad, that’s quite likely.
Let’s recall Pets.com, and its singing sock puppet. It went bust ten months after the big game. All that fame…then phut.
*Google ad revenues from Reuters, February 2014; ITV ad revenues from 2013 annual report; Royal Mail revenues from 2013-14 annual report.
