NCOA cleans up its act; address-correction service expands database and offers nixie feature - but will publishers respond:

Folio: The Magazine for Magazine Management, Nov, 1987

NCOA cleans up its act

The U.S. Postal Service recently upgraded its year-old National Change of Address (NCOA) service, which, users says, should make it a more effective tool for updating publishers' mailing lists.

NCOA, designed to correct mailers' addresses before mailing, will now hold address changes for up to 36 months, instead of the previous limit of 18 months. This change will, in effect, double the size of the database by February 1989. The file currently holds about 30 million address changes.

A nixie elimination file that allows mailers to flag address changes on their files and eliminate them, rather than go to the expense of mailing to the new address, has also been introduced. Because the nixie file doesn't identify the new addresses, the matching rules are not as strict as they are for NCOA. If, for example, a publisher has G. Smith on its list, it would not match George Smith on the NCOA database, and the USPS would not authorize giving out the new address. But, under nixie elimination rules, the publisher would receive a "footnote' stating that G. Smith was a probable match, and the mailer could decide to eliminate the name or mail to the old address.

USPS has also attempted to clean up some of the database's inaccuracies in recent months. The largest single problem with the accuracy of the database, says Charles Morgan, chairman, CCX Network, Inc., and NCOA licensee, resulted from movers incorrectly filling out the USPS's change-of-address form. At press time, the Postal Service had simplified the form and was awaiting comment from customers and NCOA vendors, according to John Sadler, operations officer, USPS address information systems. He adds that the Postal Service is developing new computerized equipment to edit address change information more effectively as it enters the postal system.

Will usage increase?

What remains to be seen, however, is whether these changes will entice more mailers to take up NCOA. In its first year, NCOA has been sharply criticized for low match rates (between 2.5 percent and 3 percent, according to Sadler), as well as for faulty records. According to a Direct Marketing Association study, only 25 percent of mailers have taken advantage of NCOA, and half of those who haven't used it say they never plan to do so.

Publishers who use NCOA apply it to rental lists or to in-house lists of expires for third class promotional mailings. For correcting active subscriber lists, most publishers still prefer to use the Postal Service's Address Change System (ACS), which sends mailers second class address changes on computer tapes or disks after a magazine is found undeliverable.

Time Inc. and Reader's Digest are among the small group using NCOA. The former runs its file of 20 million expires through NCOA before dropping its twice-annual mailing to that group, says Robert O'Brien, director/ distribution support systems, Time Inc. He adds, however, that it would be too expensive to match the entire active subscriber file to NCOA every week or month; it's much more efficient for those changes to come in through ACS or other USPS feedback, or through subscribers themselves. A quarterly publication, on the other hand, he notes, might find it practical to use NCOA for its second class changes.

Cleans address files

Reader's Digest also uses ACS to learn of new moves for its active subscriber file, and uses NCOA to update rental and expire lists, says Coleman Hoyt, a consultant with the magazine, and one of the original architects of NCOA. Noting, too, that the database contains up-to-date Zip 4 information, Hoyt points out that NCOA is useful for cleaning address files. Since about 15 percent to 30 percent of all third class mail is incompletely addressed, he says, "it behooves mailers to do everything they can to make sure the addresses are complete.'

The Postal Service established NCOA to reduce the volume of undeliverable mail, as well as to standardize all addresses. The service is offered by 18 computer service bureaus, which serve as licensees of the USPS. (Two more bureaus have applied for licenses.) The Postal Service updates the database every two weeks.

Last year the Postal Service was unable to deliver some 3.2 billion pieces of mail. It expects to save $375 million in related costs this year because of NCOA.

The cost of NCOA varies among licensees, but the USPS estimates an average of $1 to $4 per thousand names input, plus $25 to $100 per thousand matches; licensees may also require a minimum charge of $250 to $5,000. O'Brien says that Time Inc. considers NCOA cost effective for third class mailings compared to other methods of address correction or to not correcting addresses at all.

Hoyt has very high hopes for NCOA. The service, he asserts, will eventually become so efficient that "anyone would be foolish to make a mailing without it.'