ROYAL MAIL GROUP PUBLISHING SECTOR INCENTIVES OUR UNDERSTANDING

ROYAL MAIL GROUP PUBLISHING SECTOR INCENTIVES

OUR UNDERSTANDING OF PREVAILING MARKET CONDITIONS • POST BREXIT ECONOMIC CONDITIONS ARE MORE UNCERTAIN, GDP CONSTRAINED • PUBLISHERS FACE PRESSURE AS ADVERTISING REVENUE FROM PRINT IS NOT EASIL • ABUNDANCE OF FREE MEDIA WIDENS CONSUMER CHOICE • WE CONTINUE TO SEE REDUCED VOLUMES OF MAGAZINE DISTRIBUTION AS DIGITAL • SUBSCRIPTIONS TAKING SLIGHT INCREASE IN SHARE FROM NEWSSTAND 2

THERE A NUMBER OF AREAS WHERE WE HOPE TO SUPPORT YOU Once a subscriber lapses, what are the best ways to encourage re-sign Best use of mail working with other media to increase renewal rates Customer Acquisition Win-back New Subscriber - find new subs via Direct Mail Magazine Fulfilment Renewal New Title Launch – reduced postage costs over initial period while you grow your subscriber base Cross selling Up selling Supporting your revenue growth with targeted offers to subscribers, and helping retention by doing so 3

NEW INCENTIVES TO HELP GROW YOUR BUSINESS Volume Commitment: To support the use of mail for the circulation of titles we are offering postage credit rebates for customer who simply match the volume of mail they sent in the previous year Support for new title launches: To help you maximise your return when launching a new title we are reducing the postage cost for new titles by 30% for the first 12 months and 10% for the next 12 months Use Advertising Mail to grow you customer base: Mail is a proven to achieve high scoring results for customer acquisition and retention. Our research shows that: § consumers don’t always like the idea of one communication channel -– 65% of people say that they are more likely to give mail their full attention 1 § Including mail in the marketing mix increases ROI by 12%2 To help you see for yourself the benefits of mail we are offering the chance to earn postage credits of 15% off the postage cost for tests performed over a 6 month period Better still, you can earn a 30% postage credit for each test item you send when testing the sending of your title to a brand new audience not previously targeted 1 Royal 2 Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample Source: Royal Mail Market. Reach, Brand Science Meta Analysis, 2012 4

PUBLISHING VOLUME COMMITMENT Earn Postage Credits on all your publications for committed volume over a 12 month period THE DEAL § Postage Credit rate of 2% of the Royal Mail Access price for publications (0. 6 – 1. 9 p depending on service used and weight) § Publishers required to include all titles in the volume commitment and commit to sending at least 95% of last year’s volume § Anyone sending publishing volume of at least 250, 000 items per year WHO’S ELIGIBLE § Customers must apply to participate § For postings sent directly with Royal Mail or an Access Operator § Discount paid as a retrospective postage credit in the form of postal credit vouchers or direct into a Royal Mail Account § Available only for Large Letter mailings Key Points § Use of Mailmark is optional although the customer will be required to complete an e-manifest when it is available to enable volumes to be measured. There will be no obligation to add a mailmark barcode to the item § Apply here www. royalmailwholesale. com/publishing 5

PUBLISHING TEST INCENTIVE FOR NEW TITLE LAUNCHES Earn Postage Credits for up to 24 months on all publications distributed by post when launching a new title using the Royal Mail Publishing Test Incentive THE DEAL WHO’S ELIGIBLE § Reduce the postage cost for new titles by 30% for the first 12 months and 10% for the next 12 months as the title becomes established § Any new title launch when you distribute at least 10, 000 items a year by post § Customers must apply to participate § For postings sent directly with Royal Mail or an Access Operator § The incentive encourages the use of mail for new title launches and where mail has not previously been used for a title - customer must intend to roll out the title beyond the lifetime of the incentive Key Points § Available only for Large Letter mailings § Discount paid as a retrospective postage credit in the form of postal credit vouchers or direct into a Royal Mail Account § Apply here www. royalmailwholesale. com/publishing 6

PUBLISHING TEST INCENTIVE FOR RENEWALS USING MAIL Earn Postage Credits when testing the use of mail to improve renewal rates using Royal Mail Advertising Mail Test Incentive THE DEAL § Postage Credit rates of 15% for tests that introduce the use mail for renewals or for tests that add a new stage of mail to the renewal process § Tests can be performed over a period of up to 6 months WHO’S ELIGIBLE § Any test of subscription renewal mailings of a minimum of 10, 000 items § For postings sent directly with Royal Mail or an Access Operator § Available for incremental mail for subscriptions renewals Key Points § Discount paid as a retrospective postage credit in the form of postal credit vouchers or direct into a Royal Mail Account § Apply here www. royalmailwholesale. com/publishing 7

PUBLISHING TEST INCENTIVE FOR ACQUISITION AND CROSS-SELLING Earn Postage Credits when testing the use of mail for new subscriber acquisitions and cross-selling using Royal Mail Advertising Mail Test Incentive THE DEAL WHO’S ELIGIBLE § Postage Credit rates of 15% for advertising mail tests for up to 6 months to assess whether mail can improve subscription acquisition and crossselling § Any test of advertising mailings of a minimum of 10, 000 items § For postings sent directly with Royal Mail or an Access Operator § Available for tests where mail has not previously been used e. g. use mail to promote new titles, new audience testing and frequency testing Key Points § Discount paid as a retrospective postage credit in the form of postal credit vouchers or direct into a Royal Mail Account § Apply here www. royalmailwholesale. com/publishing 8

HOW TO APPLY You will need to submit an application form that will ask for the following details: • Company name • Details of your postal supply chain including your: • Name of your postal providers • A list of any credit account numbers you hold with Royal Mail • Your Unique Customer Identifier (UCID) (if posting through Access) • Mailmark Participant ID • A description of the test if using test incentive • Last years posting volume if using the volume commitment incentive • Your expected volume and start date § You can find the Application forms and information on how to submit them at www. royalmailwholesale. com/publishing/ § We may ask you to provide samples of your publications so that we can check they meet our ‘Publishing Mail’ definition. § For information and help please visit the website at the address above, contact your postal provider or contact us at Royal Mail be emailing groupincentive@royalmail. com 9

IN UNCERTAIN TIMES HOW CAN BRANDS BUILD TRUST? § We live in uncertain times and this isn’t changing: § Political § Economic § Social § Technological § Legal § Environmental § It is important every message you deliver can be trusted and mail can help build trust 48% OF CUSTOMERS WON’T BUY FROM A COMPANY THEY DON’T TRUST* *Source: 2017 Edelman Trust Barometer 10

THE VALUE OF MAIL IN UNCERTAIN TIMES BRANDS NEED TO BUILD TRUST AND ADDING DIRECT MAIL TO YOUR MARKETING MIX CAN HELP § New research* confirms this and shows that mail is proven to deliver reassurance and credibility and these are key components to building and maintaining trust § Mail is seen as valued, confidential, important and secure and drives response * Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample 11

HOW MAIL BUILDS TRUST MAIL IS VALUED AND MAKES ME THINK BETTER OF THE SENDER 70% Do the following statements relate mostly to mail or email you receive from companies? 30% Mail 30% Email It makes me feel valued It gives me a better impression of the company * Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample 12

HOW MAIL BUILDS CREDIBILITY Now thinking about the mail and email you receive from companies, how would you describe the way they communicate with you? 87% describe mail as ‘Believable’ (vs. 48% for email) * Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample 13

MAIL IS VALUED BECAUSE IT’S SECURE Thinking about how companies or organisations contact you, what is your preferred method of contact for sensitive or confidential account information: 51% 35% 12% Post Email Phone call * Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample 1% SMS alert 14

MAIL IS VALUED BECAUSE IT’S PRIVATE To what extent do you agree or disagree with the following. . . 65% I am confident that the contents of my mail are private * Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample 15

PEOPLE PAY ATTENTION TO MAIL Do the following statements relate mostly to mail or email you receive from companies 65% Mail 35% Email “I think that’s the thing with post… I personally think there’s some value in it because people actually look at it. ” Jack, mid-20 s I am likely to give it my full attention • Royal Mail Market. Reach Research conducted by Kantar TNS in May 2017: Base 1269 UK adults, nationally representative sample • Quote from Market. Reach/ Illuminas Local Government Research, 2017 16

MAIL HAS LONGEVITY On average, an item of addressed advertising mail stays in the home for 17 DAYS a door-drop stays for 38 DAYS and a bill or statement for 45 DAYS* * Source: Private Life of Mail, 2015 17

FROM TRUST TO PROFIT Including Mail in the marketing mix increased ROI by 12%* 36% of people have bought or ordered as a result of receiving mail in the last 12 months** *Source: Royal Mail Market. Reach, Brand Science Meta Analysis, 2012 ** Source: IPA Touch. Points, 2016 18

INCLUDING MAIL IS AN EXCELLENT WAY TO BUILD TRUST A MEDIUM CAN CONVEY A MESSAGE § Mail’s attributes - tangibility, tactility and longevity help build trust while also driving short term commercial actions. Therefore adding or including mail in the marketing mix is an excellent way to build trust. 19

HOW WE CAN HELP 20

THANK YOU NAME PHONE NUMBER Email address Royal Mail, the cruciform and all marks indicated with ® are registered trade marks of Royal Mail Group Ltd 2014. Registered Office: 100 Victoria Embankment, London EC 4 Y 0 HQ. © Royal Mail Group Ltd 2014. All rights reserved. 21