Postal Service monitors ad percentage


By Max Heath
National News­paper Association

There’s been an uptick of newspapers found in violation of the U.S. Postal Service 75 percent advertising rule.

The regulation prohibits periodicals from running more than 75 percent advertising in more than half the issues in a 12-month period.

Newspapers have been jarred by permit “revocation” letters from the Postal Service’s Pricing and Classification Service Center threatening loss of periodicals mailing privileges for this violation.

The loss of periodicals privileges would create immediate rate increases for newspapers, which would have to mail at standard rates.

“It could also mean a day or more of delay in service, as standard mail is supposed to be a deferrable service when mail volume is high,” said Tonda Rush, chief executive officer for the National Newspaper Association.

More importantly for Indiana newspapers, the status change could lead to the loss of public notice advertising, because state statute requires a periodicals permit for official newspaper eligibility.

Do I automatically lose my periodicals permit?

Not if you take immediate and sustained action to get the advertising percentage at 75 percent or below in at least half your issues.

Remember, you can be at 75 percent; you just can’t be more than 75 percent.

Despite the strong language of the threat letter, U.S. Postal Service staffers over the years have repeatedly assured me that they don’t want to take a periodicals permit away if they can avoid it. They are just charged with enforcing regulations and addressing violations that come to their attention.

I got a ‘revocation’ letter. What should I do?

First, write a letter or email (if you can discern who to send it to from the letter) to the Pricing and Classification Service Center within 15 days of receipt, as specified in the permit “revocation” letter.

State that you wish to appeal the decision and plan to take steps to get your issues into compliance. They will then send you an agreement to that effect, which you should sign, date and return immediately.

The key is to keep the paid advertising percentage at or below 75 percent for enough straight weeks to get the 12-month moving average below half of the total issues during the time period.

Then add a few more issues for good measure.

Once you’ve come back into compliance on 12-months worth of issues, resume smart management of the 75 percent rule.

Simply, there will be some issues heavy on preprinted advertising inserts (in which linage is counted as 100 percent advertising) – say in November and December – that have no chance of staying under 75 percent.

That means that in lighter months – say February or July – rather than cutting back pages for a low-revenue issue, fill them with editorial to get the numbers up.

Other issues can just barely exceed 75 percent. Those provide a low-cost chance to add non-paid or editorial material without expanding your paper by more than two pages. Those are the ideal target issues to keep in compliance.

As an aside, it isn’t in the best inter­est of periodicals, a class that strug­gles to maintain its identity within the Postal Service, to relax editorial standards in favor of excessive advertising. Looking more like standard mail is a road that could lead to being charged and served like standard mail.

Why are more papers receiving letters?

Several reasons, including one competitor reporting another. I’ll give two more:

• The trend toward pre­printed advertising inserts, often accompanied by de­clining ROP in many adver­tising categories. Advertisers shift from ROP to preprints to better control color, print quality, cost, etc. Newspapers must track their own compliance to avoid violation.

• The PostalOne! business accounting system has built-in checks of various functions, and the 75 percent rule is one of them. Reports of an increase in newspapers being caught via PostalOne! at the original entry office are increasing based on newspaper calls and emails.

It’s not automatic, but postal employees can run an advertising report to see the how many issues are more than 75 percent for any 12-month period. And workers are likely audited on their diligence in running that report.

Max Heath, postal chair­man for the National News­paper Association, is a postal consultant for Athlon Media and Landmark Community Newspapers.