consumer preferences april 7 redo

8/2/2019 Consumer Preferences April 7 Redo

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Consumer Preferencesfor Communications Media

Chrystal Szeto and Luis Jimenez(Pitney Bowes)

Background Paper No. 4, April 7, 2005Version 1

This is one of several background papers that are being prepared as part of the Pitney Bowes research

project entitled, Electronic Substitution for Mail: Models and Results; Myth and Reality. Please submitcomments to: [email protected].


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Consumer Preferences Page 1

Consumer Preferences for Communications Media

Chrystal Szeto and Luis Jimenez1Pitney Bowes

April 2005

New media offer consumers a wide array of choices to access, disseminate and display all

forms of information. Historically, new media complemented rather than eliminated the oldermedia. Is this pattern changing with the more recent introduction of digital media? Whatdoes market research tell us about the preferences of todays consumers for electronic vs.

paper media?

Paper has fueled communication in societies for millennia. The invention of the printing presssaw the popularization and explosion of printed media, an expansion that has lasted for 550years. However, press reports starting in the mid 1970s began to announce the imminent demiseof paper, foretelling the advent of a nearly paperless society.

Predictions of a new medium completely eliminating the old one have reverberated throughoutthe history of communications: cinema would eliminate live theatre; radio would replace

newspapers; television would do away with radio; the telephone would eliminate the need formail; microfiche would replace paper; video recorders and cable television would supplant

cinema; email would make all physical mail obsolete. In reality, all of these doomed mediahave survived and persisted. In particular, paper-based communications appear to have thrived

rather than declined.

This paper reviews research that aims to explain why paper-based communications persist;

attempts to understand why paper has not completely disappeared and yielded to electronicsubstitutes; and presents research that shows where and why paper media still appeal toconsumers. It further explores the degree of comfort that consumers have today with paper

versus electronic media.

Summary Findings and Conclusions

Paper is used to store only about 0.01% of the worlds information stock. Yet it seems

ubiquitous, and its presence is patently more obvious than that of the electronic bits and bytesthat are overwhelmingly more numerous.

1 The authors are members of the Corporate Strategy Group at Pitney Bowes. Chrystal Szeto is Strategy Analyst.Luis Jimenez is Senior Vice President and Chief Strategy Officer. The authors are indebted to Constantina Poga,Director, Strategy Projects, for an early draft of this paper, and to Shawn Flynn, Senior Analyst, for valuable input

throughout the paper and for the background on the history of paper.


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Studies examining consumer communications usage in the workplace indicate email is surgingwhile other media such as voicemail are slowly declining. However, cross-cultural studies in

developed countries show that, although some differences exist (for example, in email adoptionrates and mobile phone usage), people in the workplace continue to add new elements to theirtoolkit, but these new tools do not fully replace the old ones.

We have found a substantial body of research showing that consumers have a predilection forpaper in its many forms. The familiar medium of paper makes people feel comfortable and thereis, to this day, still little incentive for them to change. Some of the research may surprise thosewho advocate the end of paper and mail. For example, research in Australia, Finland and the

U.S. revealed that the preferred consumer channel for many types of communications is stillletter mail, including for receiving invoices. A parallel finding is that Finnish consumers

willingness to receive letters electronically has not increasedin the past five years. These resultsare particularly surprising, since Scandinavia is generally considered an early adopter ofelectronic communication media and Finlands consumers are rated among the most adept at

assimilating new technologies.

Anthropological and sociological studies in the UK and the U.S. have revealed that people havea preference for regular mail for certain applications owing to the so-called affordances ofpaper i.e., the qualities of paper that support human interaction. This body of work shows that

paper mail supports the way members of households do things together and is therefore hard todisplace. Paper mail helps mediate relationships between individuals and supports the way a

household is socially organized. Activities take place in defined places in the home amongmembers of the household, each of whom adopts defined roles and responsibilities: bill payer, orcoupon saver, or entertainment manager.

Although such type of ethnographic research i.e., observing people in day-to-day tasks has

not always been widely reported in the literature, we know it to be taking place across a wide

range of companies and research institutions. The research publicly available shows that paperand mail mediate across roles at home and in the workplace in ways that make people value its

properties and affordances.

Paper mail remains the preferred medium for information receipt, but is not always the preferredmedium for responses to mailed communications. This is where electronic communications areand will continue to have the greatest impact in the near term. However, there is more than

simple predilection for paper or electronics at play in these expressed consumer preferences.Data security and privacy are two key reasons why many U.S. consumers have continued to pay

bills by check through the mail instead of adopting online bill payment. Nearly half ofconsumers that do not pay bills online refrain from doing so because they fear for the security of

their data. Almost the same proportion refrains from doing so because of privacy issues.

Another factor that requires more fact-based research than is currently available is the so-called

generational effect. Plenty of speculation in the press would have us believe that youngergenerations have already fully adopted email and do not send or receive mail. Interestingly,however, one recent study shows that generation has not yet had a discernible impact on mail

received by U.S. households. In fact, age and income continue to be better predictors of theextent to which businesses will try to reach each consumer in the household by mail or not.


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However, some new trends are emerging with regard to responses to communications. Thesetrends, while still difficult to quantify, suggest a stronger preference by younger people to use

electronic media for their personal correspondence and financial documents. In fact, in the U.S.the preference for paying bills online almost doubles for people under 30 compared to those inthe 30-39 year old age group.

The Millennial generation those born between 1982 and 2001 is now entering adulthood.Yet their preferences have not yet been widely studied. What is known is that Millennials aretechnologically savvy, very receptive to new ideas and technologies, and enjoy sharinginformation with friends, a pastime that is facilitated by electronic communication. Yet other work

suggests that Millennials also have traditional values, and are predicted to be the most clean-cutand homogenous generation since the GI generation of the 1930s.

Millennials represent roughly 30% of the U.S. population. It is, of course, conceivable that theycould radically shift their preferences from paper to electronic media, thus having a gradual impact

on mail over the long term. But since mail sent by households constitutes only some 10% of themailstream (most of it being check payments and greeting cards), the key question is how

businesses will react to generational preferences. Will businesses that want to have relationshipswith this newer generation totally abandon direct mail and financial statements to communicatewith Millennials? Will employers set up special, unconventional workplaces to accommodate the

Millennials' preferences for new technologies? Will marketers increasingly inundate these newconsumers with only electronic messages? Or will paper-based media persist for yet another

generation and beyond as todays clear preferences for mail extend well into the future? Thesequestions remain unanswered today because of lack of substantiating research.

What we do know is that the resilience that applies to paper media carries over to mail. Thus,mails affordances are difficult to replicate in an electronic world and this explains consumers'

adherence to mail. Mail is relevant, deeply rooted in our individual habits and societal rites, and

has the ability to impact our lives. It is hardware and software independent, portable, long-lasting and, in many ways, less vulnerable to destruction than digital alternatives.

However, we may not yet have begun to think of mail properly. Traditional postal definitions of

mail products concentrate on its value as a transport medium, and focus on attributes such asspeed and reliability, price, content, shape and weight. We must venture to consider instead aricher set of affordances to properly assess mails value. Instead, we should be viewing mail as a

channel for: summoning and answering, sharing knowledge, documenting and informing, givingand receiving, providing proof of a fact, recording the beginning or end of a transaction. It is

these affordances that will most likely make mail a valuable channel for a long time.

1. Past Predictions about Media Evolution

The pessimistic reports for paper and mail that began to surface in the mid-1970s originated fromobservations of the rapid adoption of new entertainment, communications and documentation

technologies (Chopra, 2005a). The advent of radio, cinema and television profoundly expandedthe audience size of their print media predecessors. Technologies like email, mobile telephony


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and SMS spurred an explosion in the number of messages sent. This proliferation led many toquickly forecast the demise of the old media and messaging methods.

However, many of the doomsday predictions regarding a new technologys impact have turnedout to be false. In 1964, Sir Herbert Read, poet, literary critic and philosopher, predicted that

cinema would be replaced by television in 20 years time.2 We know now that cinema and

television viewership are both constantly evolving and growing and there is today little talk ofone replacing the other.

However outlandish such predictions seem now, it seemed conceivable at the time that the new

media would bring the rapid end of traditional media such as paper. In the 1970s, microfilm andmicrofiche were touted as the new cost- and space-efficient alternatives to paper archives.

Facsimile machines would eliminate mail. Magnetic storage, microcomputers and officeautomation systems would bring a paperless work environment. Later, in the 80s and 90s,electronic mail, voice mail, the Internet and optical data storage media were proposed as the

latest harbingers of bad news for paper.

To date, none of these burgeoning technological innovations seems to have replaced the need fortraditional paper or mail in a significant way. New electronic alternatives have merely reducedsome forms of paper (e.g., personal correspondence). In other cases, they have had little effect

on paper media (e.g., greeting cards). In still other cases the new technologies appear to havestimulated mail to a degree (e.g., growth in direct mail due to improved targeting software, or

increased package volume from Internet shopping).

During the past 20 years, paper use has more than doubled. Today, in the midst of explosive

growth of electronic media like the Internet, paper use continues to grow in offices, foradvertising and for disseminating information. Paper tonnage consumption is projected to

increase until at least 2021 for all paper applications with the exception of newsprint.3

Interestingly, many of the new display and storage media have replaced their own technological

predecessors: punch cards and punch tape used with the early computers are no longer to befound; microfilm and microfiche are in danger of fully disappearing; the market for fax machines

is in decline; and the original forms of private-network email no longer exist (Burton, 2004;Davidson Consulting, 2001). Today, there is even talk that voice over Internet Protocol (VOIP),mobile telephony and SMS may eventually replace much of what has now become traditional

wireline telephone service.

To be sure, digital media have affected many activities, including letter writing and newspaperreadership. But some forms of letter writing persist to this day (mainly in the form of greeting

cards), and newspapers seem to be holding their fair share of the publications market and are inno danger of disappearing any time soon. It appears that even when consumers expresspreferences for new communication media for some applications, the traditional media slowly

decline and settle into a steady share of the total media pie that is never fully replaced (Naderand Jimenez, 2005).

2 See Lee (2000), Bad Predictions.3 The Future of Paper study (InfoTrends/CAP Ventures, 2003) predicts total paper tonnage consumption will

increase from 45 to 50 million tons between 2001 and 2021.


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2. Trends in the Preference for Paper Applications

A 2003 study investigated the future of paper and projected growth rates for the printing, paperand printing equipment industries (InfoTrends/CAP Ventures, 2003). The study included marketresearch about consumer preferences regarding paper versus electronic media for a variety of

applications that had traditionally used paper media. The applications ranged from printed media

(books, magazines and newspapers); to transactional material, such as bills and statements; tomedia used for personal expression, such as photos and greeting cards (Figure 1).

The study found that, for a wide range of applications, consumers continued to prefer paper. For

many applications, however, consumers have begun to prefer a mix of paper and electronicmedia. Interestingly, no application showed a pure preference for electronic media.

Figure 1. Consumers Preferred Method of Receiving Documents

0% 20% 40% 60% 80% 100%

Books

Magazines

Newspaper

Phone and Other directories

Catalogs

Bills / statements

Instructions, manuals

Other direct mailPhotos

Greeting cards

Personal letters / notes

Paper Both Electronic

Source: The Future of Paper, InfoTrends/ CAP Ventures (2003).

Figure 1 shows a clear complementarity between paper and electronic media. As the dominantpredilection for paper falls, the consumers preferences switch to simultaneous use of both

media. Consumers do not prefer solely electronic means for any type of communication, andonly in one case did the preference for the electronic receipt medium exceed 20% of consumers

(23.5% prefer electronic media for other direct mail).

The preference for paper evidenced in Figure 1 may be due to its perceived efficacy. When

consumers were asked about the relative effectiveness of each medium (Figure 2), similar results

were obtained. A majority of respondents believed books and magazines were most effectivewhen displayed in paper form. Interestingly, the perceived efficacy of both direct mail andcatalogs in Figure 2 is higher than the preference for the same media shown in Figure 1.


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Figure 2. Print Customers Perception of Most Effective Media by Application

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Forms

Reports, presentations

Directories

Newsletters

Bills, statements

Professional, technical, reference

Financial/SEC-mandated materials

Annual Reports

Catalogs

Brochures and marketing collateral

Direct mail (excluding catalogs)

Magazine and periodicals

Stationery

Promotional signage

Books

Paper Require both Electronic

Source: The Future of Paper, InfoTrends/CAP Ventures (2003).

Paper-based media sometimes have a direct electronic substitute that attempts to emulate the

originals functionality, such as an e-book for a paper book, or a marketing email for a directmail letter. Additionally, an alternative electronic vehicle can be offered that meets the same

basic need as the paper-based medium but offers an entirely different experience such asbecoming informed by TV news rather than by newspapers, or being entertained by TV ratherthan by reading a book. As a result, the underlying choice between paper and an electronic

medium may be influenced by the availability of a plethora of alternatives, all of which may

compete with each other for an individual's attention.

3. Media Proliferation and Fragmentation

How have media proliferated over the years? Paper-based media that convey information, suchas books and newspapers, were the main medium in existence until the early 1900s. Modern-dayinformation media based on electric power and electronic circuits, such as the radio, telephone

and television, entered the mainstream only during the 20th century.4

Today, consumers are offered a wide array of media for advertising and entertainment purposes.Saturated with multiple media, consumers are increasing total time spent with media, often at theexpense of time spent with some of the individual media. As a result, total time spent with

media per person in the U.S. has increased from 3,445 hours per year in 1999 to a projected3,660 hours per year in 2003 (Media Info Center, 2004). More than 70% of consumers use

various media simultaneously (BIG Research, 2003), such as reading a magazine while

4 The first radio transmission occurred in 1895, but its peacetime use did not begin to spread widely until the 1920s

(Bellis, 2005c).


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watching TV or listening to radio. Although gender does not appear to be a significantindicator of likelihood to multitask, age and income are strong indicators of this activity.

Young consumers multi- task more than those in any other age group. Of consumers aged 18 to34, 90% multi-task while watching TV and 80% multi- task while online. High- income

consumers earning more than $75,000 per year are more likely to multi-task while using

magazines and newspapers, and their predilection for multitasking while watching TV or onlinewas matched only by middle-income consumers (Forrester, 2004c).

Newer media have long captured the lions share of individuals entertainment time. In North

America, people spend the most time watching TV (Figure 3) and this time is almost double thetime devoted to reading newspapers and magazines. Interestingly, time spent with radio (the

medium that TV would eliminate) is growing. The CAGR for radio between 1999 and predicted2003 consumption was only 0.3 percentage points lower than that of TV. As Figure 4 shows, useof print media decreased by 30 hours per year from 1999 to 2003 (Media Info Center, 2004). An

older study had predicted a decline of 21 hours per year from 2000 to 2005 (Veronis Suhler,2001)

Figure 3. Average Hours per Week Spent with Media Activities

8.7

5.5

2.7 2.3 1.9 1.9

0

2

4

6

8

10

Watching TV Listening to

the radio

Reading

newspapers

Online/ surfing

the Web

Reading

magazines

Watching

DVDs or

videos Source: How consumers use their free time, (Forrester, 2002).

Figure 4. Hours of Media Consumption Per Person Per Year

1698 1734 1760 17961643

436 406410411424

80 107 136 154169

0

200

400

600

8001000

1200

1400

1600

1800

2000

1999 2000 2001 2002 2003p

TV

Radio

Printed Media(Magazines, Books,Daily Newspapers)

Consumer Internet

Box Office

Source: Media Info Center (2004), Media Consumption Based on Hours per Person.


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The proliferation of media and their coexistence over time is also well illustrated by theevolution of the shares of total advertising expenditures shown in Figure 5 for the U.S.5 The

advertising industry as a whole has experienced steady growth for the majority of the past 25years. Near-term projections are for a 6.5% compound annual growth rate for advertisingspending between 2003 and 2008.6, 7

Figure 5. Changing Share of Advertising Media in the U.S.

0%

20%

40%

60%

80%

100%

1946

1949

1952

1955

1958

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

Newspaper TV Magazines Radio Internet Direct Mail

Sources: Pitney Bowes analysis based on Veronis Suhler Stevenson, 2004b and DMA, 1995-2004 data (Diakova,2005).

This fragmentation of media, however, is of special concern for advertisers. Whereas in 1970 ittook three 30-second advertising spots on TV to reach 70% of the population, in 2003 it took 96.Further, the emergence of technologies such as Tivo and other forms of personal video recorders

(PVRs), are allowing adopters to skip an estimated 73% of commercials. With Tivo usersgrowing from 3% in 2003 to an estimated 70% of the population by 2008, this trend may indeed

trouble advertisers.8 Consumer books, the only print medium that showed any growth between2001 and 2003, are primarily funded by consumer purchases and subscriptions, not advertising.Advertisement-funded daily newspapers and consumer magazines saw declines in time allocated

to viewership during the same time frame (Media Info Center, 2004).

Fragmentation of consumer time is also affecting how the most popular entertainment medium,the television set, is used. In the U.S., consumers spend 8.7 hours (Figure 3) per week watching

5 See Diakova (2005) for a full discussion of the evolution of advertising and direct mail in the electronic age.6 See Veronis Suhler Stevenson, 2004b.7 Media providers also use others advertising channels to promote their own services . Two thirds of dotcoms werefound to use direct mail for promotions (Pitney Bowes, 1999). Posts offer the direct mail channel and spend on

advertising; for every pound that Royal Mail spent on advertising it generated 4.8 pounds in net mail revenue(Kojey-Strauss, 2002 pp 1- 7).8 These facts were shared by Marc Ciccone, Director, Consumer and Supplier Innovation, Procter & Gamble at a

private industry meeting organized by Pitney Bowes in Malta in October 2004.


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television. Less than half of that time is spentwatching broadcast television, which is non-subscription, advertising-supported media (Figure 6). The majority of the time is spent viewing

primarily subscription-supported media such as cable and satellite television. Home video andvideo-on-demand are also beginning to compete for consumers' time in front of the TV set.

Figure 6. Time Spent Utilizing Television Sets

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2000 2001 2002 2003p

Broadcast TV

Cable & Satellite TV

Home Video (Video-on-demand, Pre-recorded VHSand DVD)

Source: Media Info Center (2004).

What forms of advertising may gain greater acceptance in the future? Although consumerInternet advertising is projected to be the second fastest growing spending segment after movie

screen ads, its growth rate has declined significantly since its early hype days.9 Internetadvertising now makes up for a relatively small percentage (3.2%) of the entire advertising mix(Diakova, 2005). A recent white paper (Group 1, 2003) profiled the increasing viability of

financial bills and statements as a new advertising medium, a segment not included in theVeronis Suhler Stevenson study. The Group 1 study revealed that customers devoted more than

double the time to financial bills and statements as to television advertising. It is, therefore,reasonable to assume that advertising shifts will continue to occur over time, but we can alsoexpect that they will be gradual.

Another study concludes that, as consumers become smarter, they avail themselves with more

access to technology, information and products than ever before (Yankelovich Partners, 2004).They then also demand from marketers more respect for their time and attention. Precision ofthe message (i.e., talking to the right people) and relevance (i.e., delivering a message that

resonates) become more important than ever. But also two new elements emerge: power (i.e.,putting consumers in control) and reciprocity (i.e., providing value in all interactions).

These four elements are claimed by Yankelovich to provide the basis for the future successful

marketing model.

In short, the proliferation of media and the fragmentation of consumer time spent with any onemedium are posing new challenges to entertainment companies and all types of advertisers.

Managing the multichannel mix to be provided to their customers and understanding at adeeper level the consumers preferences is becoming an increasingly sophisticated art. Becausemedia continue to coexist and complement each other, paper-based media are most likely to

9 See Diakova (2005) for forecasts of Internet advertising growth rates made in 2000 vs. recent projections.


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continue to command an important share of the total mix, especially as many studies evidence aresilient consumer comfort with paper and print.

4. The Mystery of Paper and the Myth of Paperless

By one estimate, paper is used to store only about 0.01% of the worlds information stock10. Yetit seems ubiquitous, and its presence is patently more obvious than that of the electronic bits andbytes that are overwhelmingly more numerous.

Why does paper persist? Why has use of paper grown instead of declining in the electroniccommunications age of the last two decades? Perhaps we can find some clues by examining

briefly the origins of language, writing, paper and printing.11

Ian Pearson of British Telecom Labs has said that if paper were invented today, it would be one

of the most revolutionary inventions in history. 12 It would indeed be hard to imagine a worldtoday devoid of paper in all its forms. Consider the effort involved in replacing all of the

following: packaging and building materials made of paper; hand tissue and napkins; paper cupsand fast-food trays; restaurant menus and coffee filters; medicine labels and wine labels;shopping bags and gift-wrap; signs and posters; photographs and postcards; telephone books and

television guides; toys and kites; board games and playing cards; music sheets and operatinginstructions; wills and deeds; treaties and constitutions; voting ballots and certificates; price tags

and credit cards receipts; train and movie tickets; airline boarding passes and identity badges;currency and checks. The list could go on. All this would indeed be difficult, even without yetconsidering the essential use of paper for recording, displaying, transporting and storing

information. The knowledge and information applications of paper include printed media(magazines, newspapers and newsletters), mail, manuals, forms, reports, computer printouts and

office files. Some researchers have even made experiments to live without paper in their offices

and found them prohibitively costly (Sellen and Harper, 1997).

Does the preponderance of paper emanate from its roots, deep in the history of humanity and ofour societal rites? Have the evolution of language, writing and printing through the ages

embedded in all cultures a need to transmit information and knowledge in paper- like media?

4.1 From Language to Printing

The prehistoric origins of language in the form of signs and sounds, and later as fully formedwords, were obviously not recorded. Experts estimate that language arose around 150,000 years

ago.13 Later, the need to keep records of grain or other stocks originated the practice of using

10 See How Much Information? 2003, University of California (2003).11 Section 4 (and its subsections) combines information that is found repeatedly in various sources, although there isnot always consistency across sources as to exact dates of key events. Unless otherwise noted, the following sources

have been consulted for this section: Book Information Website, Britannica, Encarta, Flynn (2001), Grun (1991),The History of Printing, Robinson (2000), and Twichett (1983).12 See Pearson (2001).13 See McWhorter, J. (2003), The Power of Babel: A Natural History of Language.


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physical counting methods beads in a sack, disks on a necklace, or knots on a string. 14 Theorigins of writing seem to be rooted in the need to simplify such accounting by representing the

physical means (e.g., beads) with markings on a medium a circle on a clay table or a notch on awooden stick.15

The step from such accounting symbols to the representation of full words with pictures

(pictographs) was inevitable. The discovery of the rebus principle, in which a word or syllablemay be represented with pictures of objects whose names resemble the sound, led directly to theinvention of writing. 16 Ideograms, where each object or idea is represented by a simplified formof the object, were a natural first step to represent meaning using pictographs. 17 Alphabets then

followed as simplified representations of language that were more efficient than pictographs andeasier to learn than ideograms18.

One author proclaims that writing is the greatest invention, since it made history possible.19With writing established, the proliferation of knowledge accelerated. By 200 BC the Greeks and

the Romans were using wax tablets joined with thongs, creating a bound codex, or the earlyform of books. Ancient libraries20 were established as massive repositories of books and became

symbols of power and culture. The age of the religious manuscripts began in the 7th century inthe monasteries of Europe where monks labored in scriptoria to copy and illustrate books byhand. Assembled at times in groups of scores and even hundreds, we might say that monasteries

constituted the first printing factories and publishing houses.21 The desire to propagateknowledge beyond the clergy led to the creation of universities in the 11 th century and the

secularization of learning. Students traveled long distances to hear their teachers and to consultthe university libraries. The growing demand for access to knowledge led inevitably to theinvention of printing.

14 See Robinson, A. (2000), The Story of Writing.15 The representation of goods using clay objects is thought to have existed as early as 8000 BC in the Middle East.Scholars generally trace the origins of writing to the Sumerian cuneiform and the Egyptian hieroglyphs between3000 and 3500 BC.16 Robinson (2000) gives the following example of the use of the rebus principle in English: to represent the wordbelief, we might use the pictures of a bee and a leaf to create a phonogram.17 Chinese characters are the best example of ideograms that remain in wide use to this day . Technically speaking,

they are actually logographic writing, whereby symbols variously represent both meaning and sound. The earliestsamples of developed Chinese writing date back to the 12th century BC.18 Alphabets represent language directly, without the use of pictures, and use a minimum nu mber of consonants and

vowels to represent the phonemes and syllables of a language. The earliest surviving alphabet is from thePhoenicians around 1700-1500 BC, although alphabets are thought to have existed as far back as 3500 BC. Modernalphabets originated in Greece around 730 BC.19 Robinson (2000), The Story of Writing.20 The earliest reference to a library is an archival room filled with clay tablets of records found at Nippur,Babylon, dating to about 2500 BC. Best known is the history of the libraries established in Alexandria, Egypt (195

BC), based on papyrus and vellum scrolls , and in Pergamum, Asia Minor (197 BC), based mostly on parchment(animal skins) after the Alexandria library confiscated papyrus to preventPergamum from rivaling its supremacy.Because parchment was stiff, the practice originated of binding the sheets in a codex. This book form for

assembling long documents gradually superseded the cumbersome papyrus roll, which had to be scrolled to beread.21 Some monasteries lasted for hundreds of years , such as the Canterbury School of Manuscript in England, which

operated from 750 AD until the mid 13 th century.


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Ancient printing methods had consisted of relief-carved symbols, usually on signet stonesdabbed with mud or pigments, and transferred using pressure onto clay or other surfaces.22

While the earliest dated book based on woodblock printing is from China in the 9 th century23,printing is thought to have developed in China as early as the 2nd century AD. Booksellers hademerged in China as the business of copying and trading scroll manuscripts since the 2nd century

AD; they flourished as woodblock printing was invented. Printing immediately increased the

demand for writing media. However, printing could not spread until a stronger and easier-to-usemedium was widely available. This need led directly to the search for an ideal writing andprinting surface.

In time, writing helped organize societies, creating order through written law, administrativeprocedures, and accounting. The growth of trade required more remote contact betweenpeople.

Writing on paper became the preferred communications system between citizens and the nascentbureaucracies, between merchants (the precursors of modern businesses), and for letter writingbetween people to bridge long distances.

4.2 The Evolution of Paper

Ever since the invention of writing, humans had searched for convenient forms to record and

transport messages. Clay, stone, wood, bamboo, tree leaves, bark and metal were first used torecord messages for physical delivery. Later came the search for smoother writing surfaces.

Animal skins (leather, vellum, parchment) competed with cloth (linen) and vegetable-basedfibers (hemp, flax, jute, kenaf, straw and papyrus), all of which were used in the quest to createmedia that were better and better suited for permanent and transportable records (Flynn, 2001).

The earliest origins of modern paper can be traced to the year 105 AD in China, although

archeological evidence indicates that other forms of paper were available in China over 200

years earlier. 24 For a while, paper in China was a symbol of wealth and power, and provinceswere taxed with a quota of paper they must ship to the emperor. The Arabs learned how to make

paper in the 8th century and later spread this practice through Europe.25 Papermaking factories,first based on cotton and linen fibers, then multiplied throughout Europe.26

Paper became firmly established for literary purposes with Gutenbergs invention oftypography around 1453, a process more commonly referred to as the printing press based on

22 The Phaistos Disc, dating to 1500 BC and found in Crete in 1908, is the earliest known form of printing on baked

clay, but it appears to be a unique specimen. Samples of ancient woodblock printing have survived dating from the2nd century in China. A common method involved applying ink on the surface of a wooden block where a symbolhad been carved, then laying the paper down onto the block and sweeping it with a brush to make an impression.23 The oldest known dated woodblock printing book is theDiamond Sutra from China in 868, although the methodis much older.24 The official discovery of paper is widely attributed to Tsai Louen (also spelled Tsai Lun). He is variously

credited with having used one or more of the following: silk rags, cotton rags, fishnets , and plant bark (probablymulberry). Earlier for ms of paper dating as far back as 150 BC were made from macerated hemp fibers in a watersuspension, and may have been too rough to be useful as a writing surface.25 The Moors are said to have learned the papermaking technique from a Chinese taken prisoner at Samarkand in751. They spread the practice through Europe around the 11th century.26 One of the earliest recorded paper making factories in moor-dominated Spain was established at Xativa (or Jativa)

around 1085 to 1151.


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movable type.27 Color printing soon followed28 and innovations and expansion of the technologyrapidly accelerated the worlds printing capacity. The invention of the typewriter in 1867

brought printing to the masses.29

The resulting surge in demand for paper brought about a serious shortage of linen (obtained

mostly from rags) and spurred the search for a substitute raw material. The invention of ground

wood and chemical pulp in the mid 19th century brought about the creation of paper as we knowit today (Flynn, 2001).

The electronic age of printing began with the development of xerography. 30 Unlimited copies of

typed manuscripts could be produced locally in offices, expanding the need for paper. Theintroduction of word processors and personal computers starting in the late 1970s further fueled

the demand for paper. Today, the common practice of printing emails continues to expand theuse of paper use in offices.

4.3 Paper in the Electronic Age

It has been said that electronic media, such as radio and television, report news and events nearlyinstantly and continuously, but that their effect is short- lived. In contrast, printed media are

disseminated at intervals, not continuously, but are later available in more permanent andconvenient form to permit revisiting and reflection of events.31

It may appear surprising to some advocates of electronic methods that paper use continuesunabated. There clearly seems to be a disconnect between mental models that assume that paper

per force just has to go away and the reality of what we see in our offices and homes. The factis that, ever since the predictions of a paperless world, paper use has continued its steady

growth. 32, 33 To a large degree, the same has happened with mail.34

27 The earliest estimated date of Gutenberg's first printing is 1445, owing to the fact that Gutenbergs signature doesnot appear on any of his early printed works. Gutenbergs innovation was the invention of movable type, althoughGutenberg is popularly credited with inventing the printing press per se. His innovation integrates several

technologies known for centuries. The earliest known printing using movable type is from a government foundry inKorea that used metal type cast from bronze in 1403. Documents show that the Chinese had used the process in the11th century.28 Initially, color printing was accomplished by dyeing different letters with different colors. In 1719, Lebold, apainter, used four colors (black, red, blue and yellow) applied in succession on different plates to create the firstapproximation of todays q uadrichromatic printing process .29 Christopher Latham Sholes and Carlos Glidden co-invented the typewriter in Kleinsteuber's Machine Shop inMilwaukee. The model was perfected, produced and marketed by a gunmaker, E. Remington & Sons, in Ilion, NY.See The First Typewriter at http://home.earthlink.net/~dcrehr/firsttw.html and Encarta.30 See Owen (2004), Copies in Seconds: How a Lone Inventor and an Unknown Company Created the BiggestCommunication Breakthrough Since Gutenberg; Chester Carlson and the Birth of the Xerox Machine.31 This interesting concept is offered in Britannicas chapter on Printing.32 The following footnote is from Nader (2005): In 1975 (June 30),Business Weekreported on advances toward thepaperless office, and this theme was echoed widely through the 80s and well into the 90s. Later that year (Dec. 29,1975), U.S. News and World Reportreported, the volume of mail handled by the Postal Service declined in the last

fiscal year, for the first time in history ... the decline is expected to continue and possibly accelerate. In 1980, inThe Third Wave, Alvin Toffler declared, The paper-based Post Office had finally reached its limits. RogerSmith, then Chairman of General Motors, declared in 1986, by the turn of this century we will live in a paperless

society (Lee, 2000). In 1987 (Dec. 8), the Wall Street Journal wrote, if mail service fails to improve, 60% of ma il


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In the US, per capita paper consumption increased from roughly 305 kg per year to roughly 345kg per year between 1989 and 1999. During the same period in Western Europe, that figure

increased from 160 kg per year to nearly 190 kg per year (Sellen and Harper, 2002). Paperindustry consultant EMGE (2003) reports that office paper demand has tripled between 1980 and2002.

These trends are also borne out by smaller-scale studies, such as a survey of 2,000 executivesand managers by NFI Research (Martin, 2004). Half of small businesses have seen paperincrease, and 72% of companies keep everything or many things on paper. One reason is theneed for better record keeping in the wake of regulations that require companies to upgrade

internal controls. A particularly poignant example given in this survey is that small branchesoften keep records on paper fearing that corporate will purge the computerized files or a

computer glitch will destroy needed records.

Even in this age of multiple electronic means of communication, studies have shown that the use

of electronic mail increases the use of paper in offices by 40%. The reason appears to be thatpeople insist on printing many of their emails, as they prefer to read them on paper rather than on

computer displays.35 In fact, in the first ten years after the introduction of the PC, paper use inoffices doubled. With the explosion of the Internet and web-based email, office printingexploded again and grew 56% between 1996 and 2003 in the five largest economies of the

world.36 The total amount of information stored on paper is estimated to have increased 36%between 1996 and 200237, primarily due to the creation of office documents

Between 1989 and 1999, per capita consumption of paper and board increased in all countriesand regions with the exception of Eastern Europe and Africa. Paper consumption has grown in

relation to economic activity. As shown in Figure 7, it parallels GDP closely. The U.S. is bothone of the most technologically advanced and the most paper-intensive economies.

will be delivered electronically by the year 2000. Time magazine said in 1998 (Jan. 19), electronic mail is zappingFirst Class deliveries and could replace 25% of snail mail by 2000.33 For a through perspective on the myths surrounding the paperless office see Sellen and Harper, 2002.34 Harper and Shatwell (2003) refer to a 1960s warning from the British Government to the U.K. Post Office that itwould be out of business by the middle of the following decade due to telephone and telefax, advising it to preparefor bankruptcy.35 See section 5.2 for further discussion on the ergonomics of reading on computer screens vs. paper.36 See Jimenez (2001), who combines reports from The Wall Street Journal , GIGA and the Boston ConsultingGroup in his analysis of these trends.37 See How Much Information? 2003, University of California (2003).


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Figure 7. Paper Consumption vs. GDP per Capita

Source: Jaakko Poyry Consulting adapted in Hoffmann C. and Suczek, Y. (2002): The Paper, Printing andPublishing Industry.

Historically in Western Europe, the introduction of communications technology has spurredincreased paper consumption. As evidenced in Figure 8, over a fifty-year period, newsprint,

printing and writing paper consumption increased in Western Europe following the introductionof technologies such as mainframe computers, mini-computers, PCs, and laser printers.

Figure 8. Paper Consumption in Western Europe

Source: StoraEnso (2004): Responsibility and Performance The Long-Term Future of Paper, presented by LarsBengtsson, StoraEnso North America, November 12, 2004.


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5. The Affordances of Paper and Electronic Media

5.1 The Affordances of Paper

Why do people like to use and store paper? Why is it still ubiquitous around our homes andoffices?

An important body of research on this question has taken place in the U.K. under the leadership

of Richard Harper and Abigail Sellen. 38 As researchers equipped with ethnographic studymethods to observe people actually using various media, Harper and Sellen have focused on theaffordances" of paper that make it so valuable and resilient.

They define an affordance as a physical property of an object that makes it possible for the

owner to use that object for a variety of purposes, whether intended or not by the designer of theobject.39 It is, therefore, not an attribute of paper such as the light weight of a single sheet ofoffice paper but something that people can do with the paper object precisely because of that

attribute such as move the sheet easily across our desk.

A very simple example of our own may help us further understand the concept of affordances ofpaper. Because paper is light, easily foldable and inexpensive, it affords children the ability tomake paper planes to play and to learn about how aircraft fly. It is unlikely that whoever

invented modern paper had this affordance in mind.

Of course, many examples more relevant to the study of electronic substitution can be found.

Because paper is opaque and porous, even when something has already been printed on it, wecan mark it with additional notes. For example:

We can look at a telephone bill and circle a specific entry to remind anotherhousehold member to call the phone company and dispute a charge;

Or we can purchase a greeting card and choose a wide range of marking devicesto write on it and personalize it for maximum impact upon receipt by our loved

one;

Or we can print an agenda for tomorrows meeting that was just emailed to us aswe left the office. We can then modify the times and change the order of thepresenters with a pen during our train ride, and then from home we can fax it backto the originator for retyping and rescheduling.

Consider a typical cut sheet of white office paper. Often-cited physical attributes for this object

include its being: thin, light, porous, opaque, flexible, foldable, tearable, repairable (i.e., withtape), long- lasting, biodegradable and recyclable. Typical affordances cited in the literature, or alist of things we could do with this sheet of paper, include our ability to:

38 Richard Harper was formerly director of the Digital World Research Centre at the University of Surrey, U.K.where he studied the affordances of paper under sponsorship from Royal Mail (branded as Consignia at the time).

Harper is now Senior Scientist with Microsoft Research in Cambridge, U.K. Abigail Sellen was formerly a cognitivepsychologist at HP Laboratories in Bristol, U.K. and coauthored with Harper their book on the myth of the paperlessoffice (see Sellen and Harper, 2002).39 See Sellen and Harper (2002), Chapter 1, for a fuller description and for the origins of the concept of affordances.


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Read, skim, search and scan it. Print, mark, annotate and erase it.

Stack and overlap it. Move, port it, and pass it along.

Staple it, attach it to another paper (clip it), and attach a sticky note with amessage.

Cross-reference and index it. Store, insert (in an envelope or folder) and file it. Collate and bind it into a multi-page document.

It is these affordances that make paper appealing and that are revealed through ethnographic

research. Studies find that we are now thoroughly linked in daily habits to this unique mediumthat can be easily skimmed and sorted; is easy to make notes on; is portable, less intrusive,

convenient, tangible and interactive; is easily referenced, versatile, more robust and dependable;and provides a more convenient display than a computer screen.

5.2 Electronic Displays as a Functionally-Equivalent Media

Paper endures. We must, therefore, wonder why electronic displays have not yet begun toeliminate our need for paper media.

Electronic displays have been evolving for four decades, ever since they first appeared as

peripheral devices (or consoles) for operating mainframe computers. Of course, the principle ofhuman-display interaction had been considered since the introduction in 1897 of readouts forlaboratory instruments (e.g., oscilloscopes) and the birth of commercial television in the 1940s,

but the interactivity of these devices was rudimentary. 40 With the advent in the early 1960s of

the computer terminal for the entry of data and software commands, research into making theelectronic medium equivalent or better than paper was launched.41

Many options for making computer terminals more ergonomically suited for interaction with

people have been attempted. While the first displays concentrated mostly on keyboard and light-pen input, later versions introduced touch screens and the now ubiquitous mouse. However, the

metaphor of the typewriter has persisted, maintaining an input device (mouse plus keyboard) anda display device (the screen). In part, the research on screens is directed to emulating and tryingto improve upon the properties of paper, with apparently linear progress rather than radical

rethinking.

It is interesting to note that even the computer keyboard has not been able to shake loose thelegacy of the QWERTY typewriter,42 evidencing that ingrained human habits, once established,cannot be easily replaced simply by introducing more efficient, more sophisticated and more

technologically advanced alternatives. In short, if less than 150 years of use of the typewriter are

40 The Cathode Ray Tube, or CRT, was invented in 1897 by Karl Ferdinand Braun in Germany. In 1931, the firstpractical CRT tube for TV was made. See Bellis (2005a, 2005b).41 The DEC PDP-1 computer boasted the first graphics terminal, the Type 30 Direct View Display. Introduced in1961, it consisted of a 16 diameter circular CRT with about 1million (1024 x 1024) addressable points and a lightpen. See http://www.columbia.edu/acis/history/pdp-1.html.42 The QWERTY keyboard has been used since the very first typewriter of 1867. See The First Typewriter.


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sufficient to make change away from QWERTY next to impossible, wouldnt thousands of yearsof writing on physical media create also an enduring bond for paper that is hard to break?

To be sure, paper cannot rival the richness and versatility of the modern computer screens andtheir sophisticated word and graphic processing software. For example, the range of colors

available, the ability to change text and drawings, and the power to invoke prior work for cutting

and pasting are not affordances that paper enjoys.

Yet, despite decades of evolution, we still cannot today imagine an effective electronicequivalent of an office desk with multiple paper documents laid out in stacks or across the

surface of a desk, with sheet overlapping sheet. Such a functionally-equivalent electronic devicewould provide near-instant access to documents to an office worker without the deliberate

hesitation that comes when pausing to begin searching for that same file in a computer.

But, in many ways, much progress has been made toward emulating the advantages of paper

when designing the electronic medium. Many of the capabilities that electronic media providemimic some of the properties and affordances of paper. Screen layouts are said to be styled after

our desktop, and we also speak of files, folders, and documents in the electronic world. Emailattachments emulate paper reports clipped to short routing messages; routing slips, in fact, seemto have disappeared from offices. Stylus entered graffiti approximates corrections to the text or

editorial notes taken on the margin of a paper document. A word processing feature for trackingchanges allows us to perform version control much in the way we do with paper drafts. A

perception persists, however, that electronic media do not yet fully replicate the paperexperience.

We must, therefore, ask whether electronic display screens lack affordances that can match thoseof paper, and if so, does this shortcoming emanate from the very attributes of electronic

displays? Test subjects reading from paper required successively increasing time to read a

document with two and three columns versus one column, while subjects maximized monitor-based reading efficiency with one column and required the most time to read a two-column

document. With all formats, monitor-based reading required the most time to complete (Zaphirisand Kurniawan, 2001). Other research (Small, 1996) concludes that reading in page format, as in a

book, is more efficient than reading in scroll format, as in screens. Interestingly, books quicklyovertook scrolls when they were introduced (seefn 20).

It appears surprising that computer screen and software designers have seemingly overlookedthis important paradigm. Instead, designers still require humans to deal with a heavy, fixed

display, accommodate their bodies to the device, and scroll rather than turn pages. It is nowonder that electronic versions of books have not been very successful thus far. 43

An affordance of paper not covered by research on monitor presentation revolves around papersability to be freely marked. Freehand entry with a standard pen on paper cannot be duplicated on

a PDA, on which data must be entered or retrieved in a fairly regimented way. Interestingly, the

43 This is only recently beginning to change with the growing public familiarity with portable devices such as tabletPCs, wireless connections for Paces, and personal digital assistants. However, the handheld market will only growfrom 14 million in 2003 to 20 million in 2008, for only a 7 percent penetration. See Jupiter research at

http://www.internetnews.com/stats/article.php/3297591.


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designer of the popular Palm Pilot once remarked that his competition was paper, notcomputers.44

Researchers have found a number of differences between computer screens versus paper thatmay affect reading speed. These effects include: distance between reading material and reader,

method for text advancement (scrolling and page turning), resolution, inter- line spacing, contrast

ratio between characters, and background and reflection interferences45. Zaphiris andKurniawan (2001) note that reading paper-based text is 20-30% faster than monitor-based text,though reading-speed parity can be achieved with higher monitor resolution. Studies indicatethat screen resolution of 300 dpi, over four times denser than the current screen dpi of 72, will

facilitate speed parity. 46

One possible reason why paper usage continues to grow is that paper offers consumers the optionto utilize (or not) its affordances when it is deemed desirable. The ability to make notes onpaper-based statements, although initially thought of as being an extremely important feature,

was found to be less crucial, as people only occasionally make such markings on letter mail(Harper and Watson, 2000). Cross-references between letters and from letters to other sources

occurred in only 10% of letters, and filing and archiving were needed rarely in the ordinaryroutine of daily home activities when handling mail. However, the Sellen and Harper studyfound that letters are more trustable, implying they are more reliable, robust and dependable

than other forms of communication. It is possible, however, that even if these attributes could beprovided in a still unimaginable version of an electronic display, full emulation of the

interactional affordances of paper by screens may well still prove a nearly insurmountableobstacle.47

5.3 Life of Media

An article in Wiredmagazine plotted the physical life of various storage media, some of whichare shown in Figure 9. Beyond physical longevity, however, the relevant life of media are

affected by the ability of future generations to access the information contained in the medium.Paper media are estimated to outlast electronic media by one, and sometimes two, orders of

magnitude.

However, claims have been made that digital information can last forever and does not

deteriorate.48 But consider this: how many of us could read a 5 " floppy disk recorded a mere20 years ago? We would not readily find the hardware, software or operating system to be able

to read the medium.49 Paper not only lasts decades, even hundreds of years and up to amillennium, but it has the capability of being read by the unaided human eye at all points in time.

44 Remarks attributed to Jeff Hawkins, leader of Palm Pilot design team, as quoted in Weird Ideas that Work,Sutton (2002).45 See Zaphiris and Kurniawan, 2001.46 There is a wide body of research that compares several dimensions of human interaction with terminal screens vs.paper. Also see Small (1996), Piolat (1997), and Zaphiris and Kurniawan (2001).47 Harper and Shatwell (2003) introduce this term. Interactional affordances refer to certain properties of paper that

facilitate interaction between one or more people or groups of people, such as within a family.48 This claim is attributed to Andy Grove, then head of the Intel Corporation, by The Long Now Foundation athttp://www.longnow.org/.49 This example is given in Jimenez, 2003b and, independently, in www.longonow.org/.


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Figure 9. Lifespan of Media

1 10 100 1000 10000

Floppies

Hard drives

CDs

Magnetic tapeModern letters

Newspapers

Microfilm

Books

Clay tablets

Years Source: Wired, adapted in Jimenez (2003a).

Paper and its earlier forms, such as clay tablets, were originally used as a transport medium.

Since the proliferation of computerized reports and, more recently, massive email use, theapplication of paper in business offices has very much evolved to its use as a display mechanism.Ironically, studies show that paper is the preferred screen for displaying our digital documents

and also, as we shall see, digitally-prepared mail messages and transactions.

New evidence suggests that consumers also view paper as a reliable storage mechanism because

of its longevity. A study in the U.K., for example, showed that people who receive electronicstatements (through websites or email) print them and save them in paper form due to greater

trust in the life of the paper over the electronic medium (Spong, 2004). A similar phenomenon isbeing observed in U.S. offices due to increased awareness to safeguard records for stepped upcontrols over companies (Martin, 2004). Interestingly, it is papers affordance as a long-lasting

storage medium that propelled its demand when mass-produced books and modern librariesbecame the preferred medium for storing knowledge starting in the 15th century. It seems that,

centuries later, modern society is again looking at paper for this affordance.

5.4 The Digital Dark Age

In contrast with the resilience of paper, there is talk of a digital dark age that could ensue dueto the risks of losing computerized information. 50 Several warnings have been issued byprestigious institutions:

The GAO in the U.S. found that federal records were in danger of becoming unreadable(GAO, 2002).

In the UK, the Digital Preservation Coalition made of libraries, museums, archivingorganizations and academics warned of an enormous black hole in Britains collective

memory before the House of Commons.51 They voiced the concern about potential loss

50 A number of useful articles on this topic have been assembled as part of the Digi tal Dark Age project by the LongNow Foundation at www.longnow.org/.51 See Urgent need to save digital heritage, Stuart Millar, The Guardian, February 28, 2002, accessed from The

Long Now Foundation at www.longnow.org.


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of valuable but little publicized research and historical records stored in electronic formand not backed up on paper or other durable forms.

NASA has realized that 20% of the information on magnetic tapes that recorded spacemissions is corrupt. The tapes were not backed up with more modern media.52

A number of poignant examples may serve to illustrate that loss of information is already

happening:

A Norwegian literary museum found it lost access to its digital catalogue after its creatordied without leaving his password, prompting a call for hackers to aid the museum incracking the password. 53

The British Library estimates that thousands of digital publications are being lost everyyear.

In 1986, the BBC created a digital archive of contemporary British life to celebrate the900th anniversary of the famous Domesday Book.54 Just 15 years later, the digitalDomesday Book could not be read while the original Domesday Book from 1086 couldstill be viewed.

While the first telegram has been preserved and also digitized, the first email sent 31years ago has been lost.55

Scientists and historians can read the correspondence and early drawings of Leonardo DaVinci from over 500 years ago, but can no longer read the email or word processing files

from the founders of our computer industry that were written 30 years ago.

In February of 2005, Bank of America reported that computer data tapes containing information

on over a million federal employees, including several U.S. Senators, was lost, possibly stolen bycommercial baggage handlers (Reuters, 2005).

Why is digital information expanding so rapidly and, seemingly, somewhat carelessly? We

suggest six key reasons:

The ubiquitous availability of cheap computing power and mass storage, enabling routinestorage of critical files in personal computers.

The lack of discipline or resources in establishing and enforcing organizational protocolsto safeguard information.

The email explosion that is originating records of ephemeral transactions among partiesthat are often quickly erased, but that may become important later in order to reconstruct

a sequence of critical events after the fact.

52 See Burton (2004).53 See Digital Dark Age, at www.shift.com/content/web/385/1.html.54 The original Domesday Book was completed in 1086 by Norman monks for William the Conqueror and containsrecords of over 13,000 English settlements of the times. The 2.5 million modern-day Domesday Projects digitalrecords were finally unlocked by a joint team from the Universities of Leeds and Michigan that is researching how

to preserve digital records for the future. See www.domesdaybook.co.uk, McKie (2002) and BBC (2002).55 Comment made by the Chairman of the Campaign for Museums in the UK. See Urgent need to save digitalheritage, Stuart Millar, The Guardian, February 28, 2002, accessed from The Long Now Foundation at

www.longnow.org.


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The planned self-obsolescence of computer hardware and software technology, and themultiplicity of formats and standards used for coding, compressing and encrypting data.

How many of us know what Acorn, Altair, Amiga, Amstrad and Apricot stand for?56

The progressive realization that modern storage media decay physically much faster thatpreviously thought (Figure 9 above). For example, scratching and surface decay arecasting doubt on the reliability of CD ROMs as a storage medium. 57

The accumulation of digital information at an accelerating pace will make it hard forpeople to remember where they have stored it. As one researcher put it, its easier to findthe album with the photos than the directory in your computer that has your digital

photos.58

The above examples are likely to cause business disruptions, but not a crisis of national

proportions. More troubling, perhaps, is that we are uncertain how historians, businesses andgovernments in the future (say, those living hundreds of years form now) will be able to access

information developed today. Several efforts are underway to address this issue:

The Long Now Foundation has begun the Long Mail project to understand how to

archive digital data for centuries. The project aims to offer services to store email for thelife of a user and beyond; lifetime access to a users entire email history; and sending

email to a person or organization in the future.

Previously, the same institution developed the Rosetta Project to build an archive of alldocumented human languages and provide for its transmission deep into time, say,10,000 years. They concluded that an indestructible physical medium with analog

writing was needed to back up the computerized version and created the Rosetta Disk, amicro-etched nickel disk of extreme longevity. This project demonstrates that analogcopies on durable materials can be preserved over a long time. The first copy would

periodically be read and its contents copied onto another physical medium at a future

time, so that indefinite readability could be virtually guaranteed.

The Library of Congress in the U.S. has embarked on a massive project to createstandards that will allow users to read digital materials in the future and that areindependent of software and hardware configurations.

Although a good beginning, these efforts are partial and localized and are unlikely to yieldreplicatable or scalable solutions to the monumental problems facing the future of digitalinformation.

56 These are the names of a personal computer brands from the late 1970s that have disappeared. The Long NowFoundation reports that science fiction writer Stuart Sterling is collecting the names of such obsolete personal

computers. See www.longnow.org/.57 CD ROMs are sometimes touted as a 100-year storage medium. We have seen current estimates for reliablestorage that seldom stretch beyond 30 years, and depending on climatic conditions of temperature and light their

durability can be as short as 5-10 years. See, for example, The Myth of the 100-Year CD Room, The Independent,April 21, 2004 at www.longnow.org/.58 See comments by Jeffrey Rutenbeck. University of Denver, in Hafner, K., Even Digital Memories can Fade, at

www.longnow.org/.


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5.5 Quality and Trust

One of the biggest attractions of paper is its tangibility: the quality of the paper used plays a rolein its desirability as a communications tool. Research finds that some physical aspects of paperdefine the range of roles a message could play. For example, consumers have attitudinal

preferences for high-quality paper in the mail (Harper, Evergeti, Hamill, and Strain, 2003).

Harpers research indicates that this attitudinal preference for high-quality paper is due to theinference that the quality of paper used is indicative of the quality of the message sender.

Other work corroborates this finding. A 2001 survey showed that paper quality influences a

customers perception of the mail piece (PaperCom, 2001). When receiving direct mail from acharity, financial institution or travel company, test groups preferred white cartridge style59 as

the classiest style, to white gloss, which was viewed as the crudest style. The same surveystudied attitudes regarding envelopes and found that consumers preferred the most personallooking envelope to the richly-printed and logo-embossed envelopes more typical of many mass

distribution direct marketing pieces.

Further, research around the types of paper and language that are socially acceptable for businessand personal correspondence finds that consumers readily distinguish correspondence of apersonal nature from that of a business nature by the type of paper used (standard, white or off-

white good quality paper for business; and paper of any quality, size or color for personalletters) (Bauman, 1989). Consumers preference for a high-quality, personallooking mail piece

over a mass-produced, logo-emblazoned letter points directly to consumers preference for atraditional mail interaction.

5.6 Security and Privacy

Paper is not only tangible and immediate, but also possesses qualities of security and privacy thatare not readily associated with electronic documents. For example, reasons such as security,

privacy and ease of use are especially strong motivators for consumers to continue paying billsby check. A 2004 Henley Centre study found that one in three customers would switch banks if

their current bank no longer allowed them access to their paper statements.60 The study alsoshowed that even among those that use the Internet for banking purposes, one half say they donot have time to read their emails, and 38% say they worry about not being able to access their

account when they want to.

Section 5.4 above discussed a number of issues regarding the urgent need to safeguard electronicinformation. These issues are less applicable to paper-based media. Additionally, further

concerns are being raised recently about the reliability and resilience of electronic methods, suchas computer hard disks and the Internet. A companion paper indicates that the Internet andassociated computer systems have multiple vulnerabilities that need to be considered in any

decisions to switch to all-electronic media.61

59 Cartridge paper is a thicker grade of paper often found in drawing tablets .60 Spong (2004), Making a Statement, Henley Centre study for Royal Mail.61 Chopra (2005) discusses the range of vulnerabilities of the Internet medium, including worms, viruses, phishing

fraud, and the vulnerability to a broad network attack inherent in the open design of the Internet itself.


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Since 1999, preferencesfor traditional mailed paper statements and summaries of financialdocuments have changed very little. In both 1999 and 2001, 93% of surveyed households

preferred to receive financial documents on paper and by mail (Figure 10). This percentagedropped moderately in 2003 to 86% of households surveyed (ICR, 1999, 2001, 2003). Anindependent 2004 Forrester study revealed that 80% of U.S. online consumers not currently

using online bill payment say they will never pay bills on the Internet (Forrester, 2004a).

Figure 10. Consumers Preferring to Receive Mail and Paper Documents

69%77%

93%

62%

73%

93%

66%75%

86%

1999 2001 1999 2001 200319992003 2001 2003

All types of

documents

New product

announcementsFinancial documents

Source: ICR 1999, 2001 & 2003 Household Mail Preference Surveys.

The Ascent Group created a best practices profile that revealed that customers prefer to pay billsby mail by a margin of 7:1 to Internet (Ascent, 2004). Those who have not adopted online bill

payment cited data security and privacy concerns (Forrester, 2004a). Data security was thereason almost half (46%) of check-writers had not converted to online bill payment. Nearly the

same portion, 43%, stated privacy concerns as one of their reasons for non-conversion. Securityconcerns also appear to affect the behavior of those who use online bill payment. Nearly 57% ofall households that pay bills online do so through a billers direct site due to greater comfort with

having a relationship with the biller (e.g., utility or credit card). Only 43% of online bill payerswill use a consolidator site (Flynn, 2005).

At a recent conference62, a participant summed up the innate security and privacy of mail in thisway: No one feels as if he has breached anothers private space if he happens to view an

advertisement on anothers television set. However, viewing a message from the same advertiserin someone elses postal mail greatly increases ones discomfort. In summary, a mail piecealways has the potential for personal information to be enclosed and there is an expectation of

protection of the messages privacy. Currently, mail is overwhelmingly viewed as personal andindividualized, even though it may be mass-produced.

62 Comment heard by the authors during the USPS National Postal Forum, Washington, D.C., September 19 -21,

2004.


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5.7 Convenience

A 2003 Forrester study on the growth of EBPP revealed two new facts: between 2001 and 2002,the number of Baby Boomer households us ing EBPP grew at over triple the rate of GenX andMillennial63 households (37% versus 12%). The study also revealed that 70% of U.S. online

consumers still use checks to pay bills. Almost half of those that had not used online bill

payment stated the ease of check writing over online bill payment as their reason for non-conversion.

Moreover, paper statements, unlike electronic statements, can be highlighted, filed or placed

strategically around the house. Conversely, electronic statements are largely confined to theroom in which the computer is stored. The tangibility of paper and the desire for unlimited

access to paper statements is still prevalent among online bankers. In the UK, 71% of onlinebankers still want to receive paper statements. Surprisingly, whereas only 59% of people who donot use online banking keep their bank statements for longer than one year after initial receipt,

fully 67% of online bankers do the same (Spong, 2004).64 Further, 85% of UK consumers do notagree with their banks wanting to stop the bank statements and switching to electronic methods.

USPS market research revealed that people have a positive experience with mail because itsmoothes life out and gives them the opportunity to spend time alone (USPS, 2001 and

2004). Mail not only drives consumer behavior by inserting advertising messages into thehousehold, but also provides pleasure to the consumer by projecting images of what life could

be like, and helps to manage the commercial side of the home. The ICR survey also indicatedthat it takes less time to open mail versus email and that people are about 25% more effectiveand faster at sorting paper-mail against email. Paper mail provides information about such

things as sender and topic that are often difficult to discern in an email (ICR, 2003). Further,paper, unlike email or electronic statements, does not require special technology for it to be

viewed. Searching a paper document does not require the use of special functions, such as

scrolling or a search function to find a filed copy.

A series of Institute For The Future (IFTF) studies conducted annually between 1996 and 2001argue that the features of messaging tools are becoming more salient than the tools themselves.

Knowledge workers are shifting from valuing tools (such as programs or applications) to valuingfeatures. Furthermore, they found that 46% of U.S., and 27% of U.K., office workers surveyedderive the most value from a few basic features of their email, voicemail and cellular phones and

do not invest more time in learning additional features. It is therefore possible that the basicfeatures associated with paper are deeply ingrained, and that because consumers have little

appetite for new features, the preference for paper could be a lasting one.

Email saturation is also a concern. Email messages are now 23 to 33 times more prevalent thanmail in Europe and in the U.S., respectively (Nader, 2004). At a recent conference, a FinlandPost researcher suggested that email takes a week to deliver (Elkel, 2004b). He was referring

63 Millennials were at least 18 years old in 2000. Howe and Strauss (2000) define Millennials as those born between1982 and 2001. Other publications may refer to this group as Generation Y.64 Spong (2004) indicates that 26% of the population use online banking and 74% do not. Additionally, he statesthat 61% of the population keep their statements for longer than one year, and that 67% of online bankers do thesame. As a result, we compute that 59% of those who do not do online banking keep the statements for a year, a

much lower percentage than for online bankers.


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Figure 11. Main Forms of Invoice Payment in Finland (1992-2004)

64

60

57

53

34

23

10

4

2

9

8

10

10

17

14

16

9

7

1

1

1

1

2

3

2

6

6

6

6

10

13

20

30

42

13

18

18

19

34

39

40

16

7

5

5

5

8

12

16

29

39

39

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

4/2005

10/2004

4/2004

10/2003

1/2003

2001

1999

1994

1992

Net bank Direct debit Phone Bank payment service Auto paying machine Counter services

Source: Heikki Nikali, Letter Services in Finland -Present State and Future 2005

Figure 12. Desired Invoice Reception and Payment Channels in Finland

-29

-74

-31

-43

-21

-38

-64

-10

-3 72

16

1

10

4

12

5

2

78

-100 -75 -50 -25 0 25 50 75 100

Undesired Most desired

Mobile

Form of invoice payment

Auto paying machine

Bank paying service

Net bank

Email

Letter

Invoice recei t channel

Text message

Internet

Counter services

Source: Elkel, K. (2004a), Invoices and consumer, Finland Post Corporation.

Furthermore, research reveals that the traditional banking statement is still the most importanttool for everyday financial management as 64% of consumers check the entries on theirstatements and a further 37% cross check their statements with receipts. Even consumers who

bank online rely on paper statements, with 67% claiming to keep them for more than a year(Spong, 2004).

ICR conducted three studies over the period of 1999 to 2003 that looked at consumer preferencesregarding regular mail versus email. These studies showed that the majority of those surveyed

(62%) prefer to receive documents, letters, and messages via regular mail. The most surprisingoutcome was that consumer preferences have not changed in any meaningful way over the


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course of four years even though email adoption has almost doubled. A 2004 Henley Centrestudy revealed that not only do 62% of Royal Mail consumers enjoy going through the mail, but

61% agree that it is easier to go through their mail than their email. At the same time, over 75%of the respondents consider regular mail more secure than email perhaps indicating one of thereasons why respondents to a CAP Ventures study still prefer paper-based documents (see Figure

1).

The Institute of the Future messaging studies conducted annually between 1996 and 2001showed some difference in the countriessurveyed regarding media usage in the officeenvironment. German office workers tended to rely more heavily on paper communication such

as fax, interoffice mail and postal mail and used significantly less email and voicemail than theUK or France. However, between 1999 and 2000, use of paper media actually decreased in

Germany while it increased in the UK (IFTF, 2000).

Three other market studies -- in Australia (Australia Post, 2003), Finland (Elkel, 2004b) and the

U.S. (Peppers and Rogers, 2001) -- showed few differences when it comes to consumerpreferences in advertising media even though the number of media differed in the three country

studies. The Australian research compares preferences across all available range of media(regular mail, newspapers, magazines, telephone, SMS, television, radio, Internet and email).The Finnish study was performed over a more restricted set (regular mail both addressed and

unaddressed, telephone, SMS, and email). The U.S. study looks at direct mail, printedadvertisements, radio, television, email, Internet and telemarketing.

The Australian study (Figure 13) found that addressed letter mail is clearly the most desiredchannel for diverse content messages. When there is a variety of competing media, consumer

preferences are spread but regular mail is always amongst the most preferred. Depending on themessage content, customer preference for mail ranged from 71% for loyalty program

communications to 26% for new product announcements (whereas 44% of the consumers

preferred television and only 8% email announcements). Across the various message contents,addressed mail was the clear winner; if one includes all paper-based media, direct mail is

preferred by an average of 67% of consumers. One notable finding of the study was that,compared to other forms of reception for essential messages, a large majority of consumers

preferred addressed mail to receive bills (91%), financial accounts or statements (91%), annualreports (77%), and explanations or changes to Terms and Conditions (82%).


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Furthermore, the Finnish study showed that the consumers who choose letter communication astheir preferred channel reject more of the other channels both absolutely and relatively (with

those who prefer email the second most active group in rejecting other media). The preferencefor email for advertisements has droppedfrom 1999 (21% over regular mail) through 2003(13%), while email penetration at home has almost doubled from 20 to 36%. This drop suggests

that almost all the newcomers to email dislike email advertising.

Another U.S. market research study by on consumer preferences for direct mail revealed similarresults (Peppers and Rogers, 2001). As shown in Figure 15, mail was found to be a veryvaluable tool for direct mail with one-third of the surveyed consumers stating that mail is the

channel most likely to contribute to establishing a relationship with them, defined as the bestchannel for keeping them informed and involved with a business. Consumers report that direct

mail has a purpose, is serving to educate, and helps organize and relax them. The perceivedvalue of direct mail has increased by 10% since 1998, owing in part to its inherenttransferability: the ability to pass a piece from one member of a household to another. A U.K.

study shows that women share up to 50% of their mail (including direct mail), and men share upto 69% of their mail with others (Harper, Evergeti, Hamill and Strain, 2003).

Figure 15. Preferred Channel for Customer Relationship Management (CRM) in the U.S.

0%5%

10%

15%

20%

25%

30%

35%

40%

Direct Mail Print Ads TV Radio Email Internet Telemarketing Source: Direct Mail as a CRM Tool, Peppers and Rogers Group (2001).

The USPS finds that one of the reasons for the survival of mail is its ability to facilitate our daily

routine (USPS, 2001 and 2004). Mail connects consumers to the market and is rooted in ourneed to shop. It is not surprising then that, across nine industries, consumers reported (Table 1)

that businesses are trying to foster relationships through the mail.

Increasing catalog circulation throughout the past decade supports this finding. Consumers find

that paper media enhances their retail experiences. A Millard Group survey found that over half(55%) of consumers shop online with a catalog in-hand (eMarketer, 2004). Further, the 2001

USPS Consumer Mail Moment Study showed that 57% of consumers expected their grocerypurchases to be influenced by their next mail delivery (USPS, 2001). Further, 52% ofhouseholds expected to order the products or services they saw advertised in their household

mail. Consumers are not only purchasing online with catalog in-hand, but they are alsopurchasing from brick and mortar stores with circulars in-hand or from lists they have generated

from household advertising mail. Moreover, if consumers feel that mail is targeted to theirinterests, they desire more targeted mail and will continue doing business with these companies.


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Table 1. Consumer Survey Results (Direct Mail as a Marketing Tool) Across Different

Industries

Industry They use the mail tofoster my relationship

with them68% Strongly Agreeing

I am likely to continue doing businesswith them (Additional % reporting they

will continue to buy from the provider ifcontacted by Direct Mail)

Large Retailers 64% 16%Credit Card Providers 58% 13%

Auto/home/life Insurers 52% 14%

Financial Services 60% 11%

National Charities 58% 12%

Source: Consumer Opinio