Saving Posts by Making Markets Marshall Van Alstyne Boston University & MIT Twitter: @InfoEcon mva@bu.edu, marshall@mit.edu Postal Vision 2020 Washington, DC April 11, 2014 2013 Van Alstyne et. al. 2014 Van Alstyne, permission granted to redistribute so long as all copyright information is preserved.
1 st Class + Std Mail ~ 70% Rev, 90% Vol $4.8B loss in 2012 ($15.9 including mandatory health and retirement) Source: USPS Financial Report 2012 Form 10-K
Source: USPS Financial Report 2012 Form 10-K Twitter: @InfoEcon 3 PlatformEconomics.org
Twitter: @InfoEcon 4 PlatformEconomics.org
You ve just paid $15 to see Ironman when you re presented with Unsolicited car ad Unsolicited preview Twitter: @InfoEcon 5 PlatformEconomics.org
Twitter: @InfoEcon 7 PlatformEconomics.org
Digital Ad Revenue Crosses $10B Source: Internet Advertising Report 2013 Twitter: @InfoEcon 8 PlatformEconomics.org
Google Platform User Platform Advertiser 1. Users declare interests 2. Advertisers buy attention 3. Google refines its matching algorithm Wash Preferences + Rinse Interactivity + Repeat Feedback Twitter: @InfoEcon 10 PlatformEconomics.org
Twitter: @InfoEcon 11 PlatformEconomics.org
Twitter: @InfoEcon 12 PlatformEconomics.org
We Need to let recipients express their preferences interactivity feedback to drive improvement to route flows of partnerships with industry mail, of data, of money a business model. Twitter: @InfoEcon 13 PlatformEconomics.org
doing all this ALL BUILT AROUND PAPER? Twitter: @InfoEcon 14 PlatformEconomics.org
Consider a new kind of stamp Twitter: @InfoEcon 15 PlatformEconomics.org
Sender Recipient Content Date Twitter: @InfoEcon 16 PlatformEconomics.org
Twitter: @InfoEcon 17 PlatformEconomics.org
Win for Recipients Gets Voice! Archival, on-demand retrieval of ad content and coupons Green, less landfill Get buy-it-now option Bi-directional: Can request info, declare intent to purchase home furnishing, schedule oil change, try new restaurant Get Paid! Twitter: @InfoEcon 19 PlatformEconomics.org
Win for Mailers Learn what they like and what they don t Like permission based ads, much higher response rate Can reward for forwarding ads to friends and family Notification of delivery, opening, interest in product, interest in seller Physical mail becomes portal to mobile access Can motivate behavior, not just clamor for attention Twitter: @InfoEcon 20 PlatformEconomics.org
Win for USPS Avoids Do-Not-Mail Can charge more for unwanted mail Move Updates at the press of a button New source of revenue from escrowed funds Closes data feedback loop enabling value proposition relative to Google and Facebook Enables electronic commerce Data layer creates platform for ecosystem of biz partners Twitter: @InfoEcon 21 PlatformEconomics.org
Platforms get enormous value from 3 rd party developers Most firms can only Profits increase when others concentrate on most valuable add to platform s Long Tail apps These are ecosystem partners USPS can have its version of MS Word / PowerPoint / Excel and let business do everything else. Twitter: @InfoEcon 22 PlatformEconomics.org
Challenges What about elderly access? DMA: Trend is extremely favorable Works for any device with web access & camera How handle rollout? Use public records: driver s license, voting, phone records, even direct mail lists Advertising pays for rollout and even motivates adoption Solves problem of hybrid mail What happens to unclaimed coupons? Simply expire and can be reused What happens when people claim coupons but never buy? Advertisers will figure this out fast! Twitter: @InfoEcon 23 PlatformEconomics.org
Opportunities Total Ad Market $167B Total E-Commerce Market $225 Television Desktop Internet Mobile Internet Newspapers Magazines 135% Outdoor Radio Cinema Twitter: @InfoEcon 24 PlatformEconomics.org
Opportunities Twitter: @InfoEcon 25 PlatformEconomics.org
Opportunities Australia Austria Belgium Canada Cypress Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Luxemburg New Zealand Netherlands Norway Portugal Spain Sweden Switzerland UK USA Twitter: @InfoEcon 26 PlatformEconomics.org
Redeemable Information Coupons let recipients express their preferences provide interactivity feedback to drive improvement route flows of partnerships with industry mail, of data, of money a business model. Twitter: @InfoEcon 27 PlatformEconomics.org
For more on Redeemable Information Coupons How to Strengthen Ad Mail by Building a Digital Information Market. (Van Alstyne, Parker, Tushar) OIG RARC report 14-002 Dec 11, 2013 http://ssrn.com/abstract=2377476 An Economic Response to Unsolicited Communication (Loder, Van Alstyne Wash) Advances in Economic Analysis & Policy 6(1) (2006) http://ssrn.com/abstract=1762212 Twitter: @InfoEcon 28 PlatformEconomics.org
Money Saving Posts by Making Markets Marshall Van Alstyne Boston University & MIT mva@bu.edu, marshall@mit.edu Postal Vision 2020 Washington, DC April 11, 2014 2013 Van Alstyne et. al.