The U.S. Postal Service is shaving $50 million from its $300 million advertising budget by consolidating all of its mass consumer advertising at Foote Cone & Belding, New York.
The USPS has ordered Young & Rubicam, New York, to return its creative assignments, including corporate image, global delivery service and special services, although some of the agency’s units will continue to handle USPS media buying, planning and ethnic advertising.
The USPS also streamlined its contracts with two agencies in Chicago: Frankel, which handles retail/Internet advertising, and Draft Worldwide, which handles direct marketing.
None of the agencies involved would comment on the changes, which resulted from an $800 million cost-cutting order issued last April by Postmaster General William J. Henderson. The PMG issued the order when it appeared that the USPS might end its fiscal year in the red for the first time since 1995 because of rising costs and lower income.
Last month M. Richard Porras, CEO of the USPS reported a third quarter 1999 net profit of slightly more than $1 billion. The same time last year, the USPS was running $900 million in the red. The third quarter ended May 21.
Over the next year and a half, the USPS plans to conduct a full review of its advertising programs, costs and use of outside advertising agencies.
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