1. Consumer insights – direct mail and people aged 16-24 August 2011 Author: MMC Sources: BMRB, Ebiquity, TGI 16-24 year olds are the age group most likely to be moving in with a partner and setting up home for the first time. They are highly responsive to direct mail, yet they receive little direct mail.

2. Snapshot of adults aged 16-24 There are currently 7.7 million 16-24 year olds in the UK; 16% of the adult population Adults aged 16-24 are the age group most likely to expect to move in with a partner in the next 12 months and are 253% more likely than the UK average to expect to do this 16-24 year olds are 494% more likely than the UK average to expect to start their first job; 84% more likely to get married and 100% more likely than average to see the birth of their first child Source: TGI Q2 2011 (January-December 2010)

3. 16-24 year olds are under-mailed Number of direct mail items received on average per week (index) 16-24 year olds are 36% more likely than the average UK adult to receive fewer than one item of direct mail per week They are far less likely than the average UK adult to receive three or more items of direct mail per week Source: TGI Q2 2011 (January-December 2010)

4. 16-24 year olds receive the least mailings All mailings sent by age, Jan 2010 – Dec 2010 (%) Source: Ebiquity January-December 2010 16-24 year olds received only 1.6% of all mailings sent January-December 2010 This is the smallest amount for any age group and represents a major opportunity to gain share of voice

5. Top ten types of mail sent to 16-24 year olds Number of mailings sent to 16-24 year olds by sub-market (volume p.a.) Source: Ebiquity January – December 2010 Mail Order, General Insurance and Organisations mailings are the most common types sent to people in the 16-24 age group UK adults aged 16-24 received 3.98 million Mail Order mailings per year and 3.91 million General Insurance mailings in 2010 - these are very low figures in relative terms 3.98m 3.91m 1.61m 1.28m 1.14m 1.10m 1.03m 1.00m 0.86m 0.76m

6. Media consumption by people aged 16-24 Top media quintiles * (index) 16-24 year olds are heavy consumers of cinema and the internet, but are less likely than the UK average to be high responders to direct mail This is to be expected, since the group is significantly under-mailed There is an opportunity to target this age group with the right mailings to increase consumption Source: TGI Q2 2011 (January-December 2010)*‘Top media quintile = highest responders to direct mail and heaviest users of other media

7. Attitude to mail – agree with statements (%) 16-24 year olds have a very positive attitude to mail Source: BMRB 2010 85% of 16-24 year olds like receiving money-off vouchers or special offers 77% of 16-24 year olds like mail to be relevant and give them useful information They are more likely to like receiving customer magazines and catalogues than the national average Response% agreeIndex I like receiving money-off vouchers, special offers or coupons 85% 113 I welcome mail if it is meant to give me useful information 77% 101 I welcome mail if it is meant to reward my loyalty 70% 103 I welcome receiving mail from companies I'm already a customer of 70% 115 I pay more attention to paper statements than to email statements 63% 100 I would like Royal Mail to offer a service so that I could tell them what mailing I'm interested in 62% 98 I welcome mail telling me about new and improved service/better offers 60% 111 I prefer to get paper bills and statements rather than access them online 59% 94 When researching a purchase online, I'd like the option of requesting more information by post 55% 112 I like being informed about special or promotional offers by post 53% 96 I like to receive catalogues 52% 153 I like to receive customer magazines 45% 118 I'd like my bank/utility/phone company/supermarket to write to me 42% 93 I often keep printed brochures/leaflets to read at my leisure 39% 118

8. Will open mail – agree with statements (%) Source: BMRB 2010 89% of 16-24 year olds will open mail if it contains a coupon They are motivated to open mail that appeals to their senses and are more likely to open post than the average UK adult if: It contains a taste (Index 127) It has a smell (Index 141) It makes a sound (Index 144) 16-24 year olds like coupons and mail that appeals to their senses Response% agreeIndex If it contains a coupon89%113 If I am the customer of the sender86%96 If it's something I have requested76%99 If it contains a magazine75%109 If I’m already considering buying the type of product74%99 If it contains a free sample69%101 If it contains a catalogue64%112 If it makes a sound (for example music)62%144 If it has a smell (for example the scent of a product)58%141 If it contains something you can taste56%127 If it contains an interactive DVD56%104

9. Reasons to not open mail Will not open mail – agree with statements (%) Source: BMRB 2010 60% of those aged 16-24 will not open mail if they have seen the same information before They are 13% more likely than the average UK adult to not open mail if they don’t know who it’s from Response% agreeIndex If I've seen the same information before60%98 If it's addressed to 'the occupier'54%108 If it is from a company I have heard of but don't deal with42%93 If my name is spelt incorrectly35%106 If I don't know who it is from35%113 If I've had too much mail on that day24%100

10. 33% of 16-24 year olds have done something in the past 12 months as a result of the direct mail they’ve received. 16-24 year olds’ response to direct mail Traditional ‘response rates’ are only part of the story: significant value is delivered beyond the initial interaction Source: TGI Q2 2011 (January-December 2011) Bought something 23% bought or ordered something 5% made an enquiry or asked or more information 15% used a coupon 5% tried a new product or service 11% visited a store 13% kept it for later use 9% passed it on 7% paid more attention to an advert Did something Asked for something

11. Voucher redemption Use of vouchers in past 12 months by people aged 16-24 (000s) 3.1m 16-24 year olds always use money-off coupons 1.2m have used a voucher or a coupon sent to them by direct mail in the past 12 months Source: TGI Q2 2011 (January-December 2011)

12. Method of response to direct mail Response to direct mail received in the past 12 months by people aged 16-24 (000s) 951,000 16-24 year olds responded to direct mail via the internet 848,000 responded to direct mail in person, such as visiting a shop 16- 24 year olds are 73% more likely than the average adult to respond via mobile phone Index 102 Index 75 Index 66 Index 173 Index 114 Index 74 Source: TGI Q2 2011 (January-December 2011)

13. 16-24 year old consumers are… highly likely to expect to be moving out of the parental home and starting their first job the age group most likely to expect move in with a partner in the next 12 months and set up a home under-mailed very positive about direct mail more likely than average to open mail that appeals to their senses: sound, smell and taste more likely than average to respond to direct mail by mobile phone receptive to customer catalogues and magazines

14. BMRB Royal Mail uses BMRB to pose additional questions to BMRB TGI respondents. A nationally representative sample of 2,000 respondents aged 16+ are drawn from the latest rolling TGI and re-contacted using CATI (Computer Assisted Telephone Interviewing). Their responses are then merged with their TGI data. www.bmrb.co.ukwww.bmrb.co.uk Ebiquity Plc A single source survey providing fast and accurate estimates of media expenditure in the UK across press, TV, radio, internet (including paid search), outdoor, cinema, direct mail and door drops. Ebiquity also provide a continuous monitor of consumers’ attitudes to direct mail. www.ebiquity.comwww.ebiquity.com fast.MAP fast.MAP is an online, real-time research company with its roots in direct marketing. It produces fast, accurate, cost-effective insights for marketing clients and agencies. Its constantly refreshed and tested panel of 30,000 profiled UK adults accurately reflects national opinion. Geo-demographic profiling tools then deliver lifestyle information on specific groups of respondents. www.fastmap.comwww.fastmap.com Mintel International Group Mintel is an independent award-winning provider of world-leading market intelligence, delivering robust information, analysis and critical recommendations. Mintel's trusted portfolio of proprietary industry solutions and products has been supporting high profile clients in key sectors such as FMCG, financial services, media, retail, leisure and education for over 38 years. With office locations in London, Chicago, New York, Shanghai, Tokyo and Sydney our global presence continues to grow. www.mintel.comwww.mintel.com Nielsen The Nielsen Company is the global leader in multinational media research and analysis. It is active in 40 markets, offering TV and radio audience measurement, advertising information services, print readership and customised research services. www.uk.nielsen.comwww.uk.nielsen.com Royal Mail Consumer Panel TNS has run a Consumer Panel for Royal Mail since 1985, measuring all consumer activity in relation to Royal Mail including full details of all mail received and sent. Information collected from panel members’ diaries is used to estimate consumer mail volumes for the UK. The panel is based on a representative sample of 1,000 households in the UK (from a live panel of 1,350 households). www.tnsglobal.comwww.tnsglobal.com TGI TGI is a continuous, single-source survey of consumer demographics, usage habits, lifestyles, media exposure and attitudes. Established in 1969, the survey provides accurate and independent marketing information on GB adults aged 15+. Annual sample size 24,000. Published by BMRB. www.bmrb-tgi.co.ukwww.bmrb-tgi.co.uk Quintile Media quintiles are created by separating media consumers into equal fifths from the heaviest to the lightest 20% in terms of their consumption of each medium. Appendix Details of research surveys and terms used

15. To find out more about the information in this presentation: Call us on:Email us at: 0800 917 0640info@mmc.co.ukinfo@mmc.co.uk Visit our website at:Visit our Infobank at: www.mmc.co.uk www.mmc.co.uk The Mail Media Centre 7-11 Stukeley Street London WC1V 7AB Or connect with us via social media: Mail Media Centre, the MMC logo and the Royal Mail cruciform are all trademarks of the Royal Mail Group Ltd. How consumers follow up on the mail they receive © Royal Mail Group Ltd 2010. All rights reserved. Royal Mail Group is registered in England and Wales. Registered number 4138203. Registered office: 100 Victoria Embankment, London EC4Y 0HQ.