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Progress in the Competitive Agenda in the Postal and Delivery Sector

Progress in the Competitive Agenda in the Postal and Delivery Sector

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

Regulation continues to be an important issue in the postal and delivery sector of the global economy. This latest volume of the series covers progress made in the competitive agenda in the industry. It is global in scope and addresses topics of great importance to scholars and practitioners of postal regulation and public sector economics.

Chapter 14: Internet Advertising and Direct Mail: Trends and Analysis for the UK

Soterios Soteri, Frédérique Fève, Jean-Pierre Florens and Frank Rodriguez

Subjects: economics and finance, public sector economics


* Soterios Soteri, Frédérique Fève, Jean-Pierre Florens and Frank Rodriguez 1 INTRODUCTION Addressed inland mail volumes in the UK historically have tended to move in line with economic and demographic growth (Nankervis et al., 2002).1 However, in recent years mail volumes have declined despite both these factors exhibiting robust rates of growth. This chapter examines the possible impact that aspects of technological substitution may be having on trends in mail volumes. Time-series econometric techniques are employed and suggest that new technology-enabled forms of communication may be driving a wedge between mail volume growth and traditional drivers of mail volume growth such as the economy and demographics. The chapter examines UK mail volume trends over time. It shows that, in contrast to other countries with advanced postal networks, direct mail volumes have been declining in recent years and have contributed substantially to the recent slowdown in UK mail volume growth. An examination of UK direct mail volumes is undertaken relative to other countries. In addition, via the combined use of time-series econometric modeling and mail content survey data, the chapter provides quantitative estimates of the extent to which Internet-enabled technology may have impacted on direct and pre-sorted mail volume trends in the UK. A key finding in this chapter is that the rapid growth in Internet advertising expenditure in the UK in recent years is likely to have had a significant and negative impact on direct mail and hence on total bulk-mail volumes. The extent, and in...

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