The twist behind your new postcode
New postcodes arriving in mailboxes nationwide to improve New Zealand Post's delivery services will also help deliver residents into the arms of direct marketers more efficiently.
NZ Post is preparing to sell a comprehensive Postal Address File (PAF) of 1.8 million delivery points, (material not previously available to end users), as part of its new 'SendRight' programme to be launched on July 1 2008.
The state-owned enterprise already sells opt-in mailing lists based on data from change of address forms and rural delivery agreements (Customers can opt in and say they want to receive advertising). But the PAF is not an opt-in system.
Although it is compliant with the Privacy Act as it doesn't contain names, it will allow advertisers to bypass 'no circulars' signs on mailboxes and address their mail with a generic title such as "to the householder".
Previously this was an inefficient advertising option as the only address database available was a generalised downloadable street file designed for finding correct postcodes. In contrast the PAF contains exact mailbox and post-box numbers.
New Zealand Post product manager addressing Matt Lythe said he expected the direct marketing business would prosper as a result of the postcode changes.
"The new file is a substantial step forward for anyone involved in the postal industry. In time it will allow direct mail companies to provide more targeted marketing as they will be able to overlay the PAF with other customer information they already have."
No two addresses will be the same within new postcode areas, so mailing lists will be more accurate, lowering bulk delivery costs. Having more postcodes will also make it possible to address mail to more specific areas.
New Zealand's postcoding systems have lagged behind other countries but will now be on a similar level to Australia, which has about 10,000 addresses per postcode. About 15% of Australian mail is promotional but in the UK and the US over half of all mail is promotional. About 12% of New Zealand mail is direct advertising.
Dr Kathy Mortimer senior lecturer at AUT University's business school, comes from the UK, where postcode analysis is extensively used in advertising going by the assumption that "where you live says something about your life."
She said such analysis was now largely accepted by residents, and said it benefited both marketers and consumers by delivering more relevant information.
Marketing Association chief executive Keith Norris said the changes would assist the trend toward personalised advertising but would not infringe on privacy. He gave the example that BMW could address advertising to areas where BMW owners tend to live.
"The concept of on-to-one marketing is growing every day."
Mr Norris said the changes would help smaller businesses in particular to advertise more effectively.
Jason Satherley, account director at business and marketing analytics company Datamine, said improved addressing quality had helped build up direct marketing capabilities in other countries. Mr Satherley said though householders might receive more advertising in future it would be targeted more at topics they found interesting.
While the new postcodes may benefit businesses in the long term, an immediate difficulty is updating mail databases. Many businesses have been left wondering how they will access postcode information and at what price.
Magazine Publishers' Association executive director John McClintock said while the association was "continually working with NZ Post to address what is still a lot of confusion in the marketplace."
Despite having some remaining questions over the new system, Mr McClintock said the association supported the changes as they would lead to more efficient deliveries.
Western Mailing sales and marketing manager Fraser Haldane said many of his customers were unsure of what the costs and benefits will be to them.
The confusion may be addressed on July 1, when New Zealand Post will launch its "SendRight" programme on its website www.nzpost.co.nz/addressing.
This will set out the new guidelines for companies making bulk mail-outs.
Businesses can currently update small amounts of information using the free postcode finder on NZ Post's website. Companies with larger databases can update by buying the PAF (updated quarterly) for an annual fee of $1000, or $3000 with a commercial license to on-sell software and extra software support.
From 2008, to qualify for a bulk mail-out discount, companies will need to achieve 85% accuracy in addressing with a statement of accuracy from a data services provider licensed by NZ Post.
Mr Lythe said he expected about 10 companies to become licensed vendors. Each would have to pay an $18,000 annual license fee. The costs they would charge for updating client databases would be up to the company.