Consumer Preferences for Communications Media

Chrystal Szeto and Luis Jimenez (Pitney Bowes)

Background Paper No. 4, April 7, 2005 Version 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 submit comments to: luis.jimenez@pb.com.

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Consumer Preferences for Communications Media

Chrystal Szeto and Luis Jimenez1 Pitney 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 older media. Is this pattern changing with the more recent introduction of digital media? What does 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 press saw the popularization and explosion of printed media, an expansion that has lasted for 550 years. However, press reports starting in the mid 1970s began to announce the imminent demise of paper, foretelling the advent of a nearly paperless society. Predictions of a new medium completely eliminating the old one have reverberated throughout the history of communications: cinema would eliminate live theatre; radio would replace newspapers; television would do away with radio; the telephone would eliminate the need for mail; 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 media have 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 electronic substitutes; and presents research that shows where and why paper media still appeal to consumers. 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 bytes that are overwhelmingly more numerous.

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 surging while 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 adoption rates and mobile phone usage), people in the workplace continue to add new elements to their toolkit, 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 for paper in its many forms. The familiar medium of paper makes people feel comfortable and there is, to this day, still little incentive for them to change. Some of the research may surprise those who 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 still letter mail, including for receiving invoices. A parallel finding is that Finnish consumers willingness to receive letters electronically has not increased in the past five years. These results are particularly surprising, since Scandinavia is generally considered an early adopter of electronic 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 have a preference for regular mail for certain applications owing to the so-called affordances of paper 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 to displace. 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 among members of the household, each of whom adopts defined roles and responsibilities: bill payer, or coupon 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 paper and 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 preferred medium for responses to mailed communications. This is where electronic communications are and 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 of consumers 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 younger generations 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 the extent 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. These trends, 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 in the 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 are technologically savvy, very receptive to new ideas and technologies, and enjoy sharing information 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-cut and homogenous generation since the GI generation of the 1930s. Millennials represent roughly 30% of the U.S. population. It is, of course, conceivable that they could 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 the mailstream (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 relationships with this newer generation totally abandon direct mail and financial statements to communicate with Millennials? Will employers set up special, unconventional workplaces to accommodate the Millennials' preferences for new technologies? Will marketers increasingly inundate these new consumers 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? These questions 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, longlasting 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 as speed and reliability, price, content, shape and weight. We must venture to consider instead a richer 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, giving and 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 from observations of the rapid adoption of new entertainment, communications and documentation technologies (Chopra, 2005a). The advent of radio, cinema and television profoundly expanded the 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 to quickly forecast the demise of the old media and messaging methods. However, many of the doomsday predictions regarding a new technologys impact have turned out 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 of one 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 and microfiche were touted as the new cost- and space-efficient alternatives to paper archives. Facsimile machines would eliminate mail. Magnetic storage, microcomputers and office automation 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 for traditional paper or mail in a significant way. New electronic alternatives have merely reduced some 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 have stimulated 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, for advertising 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 be found; 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 newspaper readership. 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 in no danger of disappearing any time soon. It appears that even when consumers express preferences 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 (Nader and Jimenez, 2005).

2 3

See Lee (2000), Bad Predictions. 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, paper and printing equipment industries (InfoTrends/CAP Ventures, 2003). The study included market research 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; to media 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 electronic media. Interestingly, no application showed a pure preference for electronic media. Figure 1. Consumers Preferred Method of Receiving Documents
Personal letters / notes Greeting cards Photos Other direct mail Instructions, manuals Bills / statements Catalogs Phone and Other directories Newspaper Magazines Books 0% 20% 40%
Paper Both

60%
Electronic

80%

100%

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

Figure 1 shows a clear complementarity between paper and electronic media. As the dominant predilection 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, and only 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 effective when displayed in paper form. Interestingly, the perceived efficacy of both direct mail and catalogs in Figure 2 is higher than the preference for the same media shown in Figure 1.

Consumer Preferences Figure 2. Print Customers Perception of Most Effective Media by Application
Books Promotional signage Stationery Magazine and periodicals Direct mail (excluding catalogs) Brochures and marketing collateral Catalogs Annual Reports Financial/SEC-mandated materials Professional, technical, reference Bills, statements Newsletters Directories Reports, presentations Forms 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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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 direct mail 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 as becoming informed by TV news rather than by newspapers, or being entertained by TV rather than 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, such as books and newspapers, were the main medium in existence until the early 1900s. Modern-day information 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 the expense 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 projected 3,660 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).

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

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Young consumers multi- task more than those in any other age group. Of consumers aged 18 to 34, 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 online was 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 the time 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 predicted 2003 consumption was only 0.3 percentage points lower than that of TV. As Figure 4 shows, use of 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
10 8 6 4 2 0 Watching TV Listening to the radio Reading Online/ surfing newspapers the Web Reading magazines Watching DVDs or videos 5.5 2.7 2.3 1.9 1.9 8.7

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

Figure 4. Hours of Media Consumption Per Person Per Year

2000 1800 1600 1400 1200 1000 800 600 400 200 0 1999 2000 2001 2002 2003p 80 107 436 424 411 136 410 154 406 169 Box Office Printed Media (Magazines, Books, Daily Newspapers) Consumer Internet Radio 1643 1698 1734 1760 1796

TV

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 the evolution 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 25 years. Near-term projections are for a 6.5% compound annual growth rate for advertising spending between 2003 and 2008. 6, 7 Figure 5. Changing Share of Advertising Media in the U.S.
100%

80%

60%

40%

20%

0%

19 55 19 58

19 82 19 85 19 88

19 94 19 97 20 00

19 49 19 52

19 61 19 64

19 67

19 73 19 76

19 79

19 91

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 it took 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 users growing 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 between 2001 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 6

See Diakova (2005) for a full discussion of the evolution of advertising and direct mail in the electronic age. See Veronis Suhler Stevenson, 2004b. 7 Media providers also use others advertising channels to promote their own services. Two thirds of dotcoms were found 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.

20 03

19 46

19 70

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television. Less than half of that time is spent watching broadcast television, which is nonsubscription, 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 and video-on-demand are also beginning to compete for consumers' time in front of the TV set. Figure 6. Time Spent Utilizing Television Sets
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999 2000 2001 2002 2003p Broadcast TV

Cable & Satellite TV

Home Video (Video-ondemand, Pre-recorded VHS and DVD)

Source: Media Info Center (2004).

What forms of advertising may gain greater acceptance in the future? Although consumer Internet 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 Internet advertising 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 the Veronis 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 also expect 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 of the 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 one medium 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 a deeper level the consumers preferences is becoming an increasingly sophisticated art. Because media 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 a resilient 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 stock 10 . Yet it seems ubiquitous, and its presence is patently more obvious than that of the electronic bits and bytes that are overwhelmingly more numerous. Why does paper persist? Why has use of paper grown instead of declining in the electronic communications 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 world today 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 cups and 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 operating instructions; 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 yet considering 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 of our 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 formed words, 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 11

See How Much Information? 2003, University of California (2003). Section 4 (and its subsections) combines information that is found repeatedly in various sources, although there is not 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 The origins 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 a wooden 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 syllable may be represented with pictures of objects whose names resemble the sound, led directly to the invention of writing. 16 Ideograms, where each object or idea is represented by a simplified form of 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 and easier to learn than ideograms 18 . One author proclaims that writing is the greatest invention, since it made history possible.19 With 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 early form of books. Ancient libraries 20 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 in the monasteries of Europe where monks labored in scriptoria to copy and illustrate books by hand. 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 propagate knowledge beyond the clergy led to the creation of universities in the 11th century and the secularization of learning. Students traveled long distances to hear their teachers and to consult the university libraries. The growing demand for access to knowledge led inevitably to the invention of printing.

14 15

See Robinson, A. (2000), The Story of Writing. 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 between 3000 and 3500 BC. 16 Robinson (2000) gives the following example of the use of the rebus principle in English: to represent the word belief, 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 earliest samples 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 the Phoenicians around 1700-1500 BC, although alphabets are thought to have existed as far back as 3500 BC. Modern alphabets 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 prevent Pergamum 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 be read. 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 13th century.

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Ancient printing methods had consisted of relief-carved symbols, usually on signet stones dabbed 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 9th century23 , printing is thought to have developed in China as early as the 2nd century AD. Booksellers had emerged 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-use medium was widely available. This need led directly to the search for an ideal writing and printing surface. In time, writing helped organize societies, creating order through written law, administrative procedures, and accounting. The growth of trade required more remote contact between people. Writing on paper became the preferred communications system between citizens and the nascent bureaucracies, between merchants (the precursors of modern businesses), and for letter writing between 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 to record messages for physical delivery. Later came the search for smoother writing surfaces. Animal skins (leather, vellum, parchment) competed with cloth (linen) and vegetable-based fibers (hemp, flax, jute, kenaf, straw and papyrus), all of which were used in the quest to create media 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 provinces were 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 of typography 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 the 2nd century in China. A common method involved applying ink on the surface of a wooden block where a symbol had 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 the Diamond Sutra from China in 868, although the method is 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 (probably mulberry). Earlier forms of paper dating as far back as 150 BC were made fro m macerated hemp fibers in a water suspension, 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 in 751. 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 followed 28 and innovations and expansion of the technology rapidly 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 know it 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. The introduction 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 the use 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 nearly instantly 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 and convenient form to permit revisiting and reflection of events. 31 It may appear surprising to some advocates of electronic methods that paper use continues unabated. 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 fact is 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 does not appear on any of his early printed works. Gutenbergs innovation was the invention of movable type, although Gutenberg 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 in Korea that used metal type cast from bronze in 1403. Documents show that the Chinese had used the process in the 11th century. 28 Initially, color printing was accomplished by dyeing different letters with different colors. In 1719, Lebold, a painter, used four colors (black, red, blue and yellow) applied in succession on different plates to create the first approximation of todays quadrichromatic printing process. 29 Christopher Latham Sholes and Carlos Glidden co-invented the typewriter in Kleinsteuber's Machine Shop in Milwaukee. 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 Biggest Communication 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 Week reported on advances toward the paperless 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 Report reported, 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, in The Third Wave, Alvin Toffler declared, The paper-based Post Office had finally reached its limits. Roger Smith, 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 345 kg 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). Paper industry consultant EMGE (2003) reports that office paper demand has tripled between 1980 and 2002. These trends are also borne out by smaller-scale studies, such as a survey of 2,000 executives and managers by NFI Research (Martin, 2004). Half of small businesses have seen paper increase, and 72% of companies keep everything or many things on paper. One reason is the need 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 branches often 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 that people 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 in offices doubled. With the explosion of the Internet and web-based email, office printing exploded 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 2002 37 , primarily due to the creation of office documents Between 1989 and 1999, per capita consumption of paper and board increased in all countries and 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 both one 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 zapping First 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 it would be out of business by the middle of the following decade due to telephone and telefax, advising it to prepare for 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 Consulting Group in his analysis of these trends. 37 See How Much Information? 2003, University of California (2003).

Consumer Preferences Figure 7. Paper Consumption vs. GDP per Capita

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

Historically in Western Europe, the introduction of communications technology has spurred increased paper consumption. As evidenced in Figure 8, over a fifty- year period, newsprint, printing and writing paper consumption increased in Western Europe following the introduction of 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 Lars Bengtsson, 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 and offices? 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 study methods to observe people actually using various media, Harper and Sellen have focused on the affordances" 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 the object. 39 It is, therefore, not an attribute of paper such as the light weight of a single sheet of office 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 of paper. Because paper is light, easily foldable and inexpensive, it affords children the ability to make 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, we can mark it with additional notes. For example: We can look at a telephone bill and circle a specific entry to remind another household member to call the phone company and dispute a charge; Or we can purchase a greeting card and choose a wide range of marking devices to 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 as we left the office. We can then modify the times and change the order of the presenters with a pen during our train ride, and then from home we can fax it back to 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., with tape), long- lasting, biodegradable and recyclable. Typical affordances cited in the literature, or a list 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 cognitive psychologist at HP Laboratories in Bristol, U.K. and coauthored with Harper their book on the myth of the paperless office (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.

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

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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 medium that 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 to eliminate 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 of human-display interaction had been considered since the introduction in 1897 of readouts for laboratory 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 the electronic 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 lightpen 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) and a display device (the screen). In part, the research on screens is directed to emulating and trying to 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 the legacy 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 first practical 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 in 1961, it consisted of a 16 diameter circular CRT with about 1million (1024 x 1024) addressable points and a light pen. 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 years of 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 and their 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 electronic equivalent 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 device would 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 provide mimic 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. Email attachments emulate paper reports clipped to short routing messages; routing slips, in fact, seem to 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 tracking changes 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 paper experience. We must, therefore, ask whether electronic display screens lack affordances that can match those of 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 monitorbased 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 (Zaphiris and 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 quickly overtook scrolls when they were introduced (see fn 20). It appears surprising that computer screen and software designers have seemingly overlooked this 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 no wonder 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 papers ability 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 tablet PCs, wireless connections for Paces, and personal digital assistants. However, the handheld market will only grow from 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.

Consumer Preferences designer of the popular Palm Pilot once remarked that his competition was paper, not computers. 44

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Researchers have found a number of differences between computer screens versus paper that may 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 interferences 45 . Zaphiris and Kurniawan (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 indicate that 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 option to utilize (or not) its affordances when it is deemed desirable. The ability to make notes on paper-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 ordinary routine of daily home activities when handling mail. However, the Sellen and Harper study found 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 be provided 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 insurmountable obstacle. 47

5.3 Life of Media

An article in Wired magazine plotted the physical life of various storage media, some of which are shown in Figur e 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 mere 20 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 a millennium, 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 at http://www.longnow.org/. 49 This example is given in Jimenez, 2003b and, independently, in www.longonow.org/.

Consumer Preferences Figure 9. Lifespan of Media

Clay tablets Books Microfilm Newspapers Modern letters Magnetic tape CDs Hard drives Floppies 1
Source: Wired, adapted in Jimenez (2003a).

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10

100 Years

1000

10000

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, the application 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 electronic statements (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 is being observed in U.S. offices due to increased awareness to safeguard records for stepped up controls 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 libraries became 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 due to the risks of losing computerized information. 50 Several warnings have been issued by prestigious 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, archiving organizations 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 Digital Dark Age project by the Long Now 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 form and not backed up on paper or other durable forms. NASA has realized that 20% of the information on magnetic tapes that recorded space missions is corrupt. The tapes were not backed up with more modern media. 52

A number of poignant examp les 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 creator died without leaving his password, prompting a call for hackers to aid the museum in cracking the password. 53 The British Library estimates that thousands of digital publications are being lost every year. In 1986, the BBC created a digital archive of contemporary British life to celebrate the 900th anniversary of the famous Domesday Book. 54 Just 15 years later, the digital Domesday Book could not be read while the original Domesday Book from 1086 could still be viewed. While the first telegram has been preserved and also digitized, the first email sent 31 years ago has been lost. 55 Scientists and historians can read the correspondence and early drawings of Leonardo Da Vinci 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 by commercial 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 routine storage of critical files in personal computers. The lack of discipline or resources in establishing and enforcing organizational protocols to safeguard information. The email explosion that is originating records of ephemeral transactions among parties that are often quickly erased, but that may become important later in order to reconstruct a sequence of critical events after the fact.

52 53

See Burton (2004). 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 contains records of over 13,000 English settlements of the times. The 2.5 million modern-day Domesday Projects digital records 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 digital heritage, 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 the multiplicity 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 that previously thought (Figure 9 above). For example, scratching and surface decay are casting 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 for people to remember where they have stored it. As one researcher put it, its easier to find the 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 and governments 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 the life 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 all documented 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, a micro-etched nickel disk of extreme longevity. This project demonstrates that analog copies 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 create standards that will allow users to read digital materials in the future and that are independent of software and hardware configurations.

Although a good beginning, these efforts are partial and localized and are unlikely to yield replicatable or scalable solutions to the monumental problems facing the future of digital information.

56

These are the names of a personal computer brands from the late 1970s that have disappeared. The Long Now Foundation 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 reliable storage 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 role in its desirability as a communications tool. Research finds that some physical aspects of paper define 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 the inference 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 a charity, financial institution or travel company, test groups preferred white cartridge style 59 as the classiest style, to white gloss, which was viewed as the crudest style. The same survey studied attitudes regarding envelopes and found that consumers preferred the most personal looking 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 business and personal correspondence finds that consumers readily distinguish correspondence of a personal nature from that of a business nature by the type of paper used (standard, white or offwhite good quality paper for business; and paper of any quality, size or color for personal letters) (Bauman, 1989). Consumers preference for a high-quality, personal- looking mail piece over a mass-produced, logo-emblazoned letter points directly to consumers preference for a traditional mail interaction.

5.6 Security and Privacy

Paper is not only tangible and immediate, but also possesses qualities of security and privacy that are 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 bills by 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 also showed that even among those that use the Internet for banking purposes, one half say they do not 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 electronic information. These issues are less applicable to paper-based media. Additionally, further concerns are being raised recently about the reliability and resilience of electronic methods, such as computer hard disks and the Internet. A companion paper indicates that the Internet and associated computer systems have multiple vulnerabilities that need to be considered in any decisions to switch to all-electronic media. 61
59 60

Cartridge paper is a thicker grade of paper often found in drawing tablets. 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, preferences for traditional mailed paper statements and summaries of financial documents 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 percentage dropped moderately in 2003 to 86% of households surveyed (ICR, 1999, 2001, 2003). An independent 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
All types of documents 69% 62% New product announcements 77% 73% 75% 66% Financial documents 93% 93% 86%

1999 2001 2003

1999 2001 2003

1999 2001 2003

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

The Ascent Group created a best practices profile that revealed that customers prefer to pay bills by 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 the reason 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. Security concerns also appear to affect the behavior of those who use online bill payment. Nearly 57% of all 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 payers will use a consolidator site (Flynn, 2005). At a recent conference 62 , a participant summed up the innate security and privacy of mail in this way: 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 advertiser in someone elses postal mail greatly increases ones discomfort. In summary, a mail piece always 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 and individualized, 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 and Millennial63 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 nonconversion. Moreover, paper statements, unlike electronic statements, can be highlighted, filed or placed strategically around the house. Conversely, electronic statements are largely confined to the room 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 online bankers still want to receive paper statements. Surprisingly, whereas only 59% of people who do not 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 not agree 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 it smoothes 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 the household, 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 indicated that it takes less time to open mail versus email and that people are about 25% more effective and 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 2001 argue 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 valuing features. Furthermore, they found that 46% of U.S., and 27% of U.K., office workers surveyed derive 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 basic features 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 than mail in Europe and in the U.S., respectively (Nader, 2004). At a recent conference, a Finland Post 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 between 1982 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 states that 61% of the population keep their statements for longer than one year, and that 67% of online bankers do the same. 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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to the inundation of messages that may leave valuable customer relationship email, although delivered instantly, sitting unopened in a recipients email box. This, he argued, may detract from some of the obvious advantages of email over mail, such as speed of transmission. Further, sophisticated software filters are spreading that block unwanted advertising mail from breaching the firewalls that protect users inside business networks. In addition, regulations (e.g., the CAN Spam Act65 ) may limit the heretofore dramatic expansion of advertising email. We should perhaps ask whether the relative value of paper mail over email might well be enhanced by these trends.

6. Consumer Research on Preferences for Paper Mail

Most of the affordances of paper can be extended to paper mail. For example, paper mail contains information that recipients hope will be worthwhile to them, secure, and can be preserved for a long time, all affordances of paper. This subject has received considerable attention by U.K. researchers. 66 The research indicates that people prefer regular mail because of the affordances of the paper it contains. Paper- mail supports the way members of households do things together (social affordances) and mail is therefore hard to displace. And while papermail may not the preferred medium for responses to mail, it will stay the preferred communication medium for businesses to households. This is because paper- mail supports the way a household is socially organized in certain physical places and associated activities, and facilitates human roles and responsibilities. Paper- mail helps mediate these social relationships. Their findings are not the only research that points to the fact that, at least for a number of applications, consumers prefer old fashioned paper. Strong consumer preference towards paper is also shown in a U.K. study conducted amongst banking customers (Spong, 2004). The study found that, even though 24% of all banking customers use online banking, 29% of consumers would switch banks if paper statements were to end. In the United States, business-to-household bills and statements volume increased 3.3% annually over 2000-2003, a period in which total First Class mailed declined (Nader, 2004). Further, bills and statements increased 7.8% annually in this period for transaction intensive industries such as credit cards, banking, insurance and utilities (Nader, 2004a). Even the Finnish, who, we are told, have historically been aggressive early adopters of technology such as cell phones and Net banks (Figure 11), prefer to receive their invoices via letter mail versus email by a ratio of nearly five to one, as seen in Figure 12 (Elkel, 2004a). Research in Sweden, another society with a well-developed electronic infrastructure, indicates that 71% of consumers claim that mail is a more secure channel to send messages. 67
65

The CAN-Spam Act is legislation enacted in the U.S. that requires companies to identify their advertising as such and make the sender traceable. It is intended to curb the explosion in unsolicited email advertising, the so-called Spam. An equivalent provision (Directive 2002/58/EC of the European Parliament) has been available in EU for some time. Johnson (2003, 2004) analyzes the probable effects of regulation aimed to curb telemarketing and email marketing. 66 See Sellen and Harper (1997), Evergeti (2000), Hammil (2000), Harper and Watson (2000), Sellen and Harper (2002), Harper and Shatwell (2003), and Harper et al (2003). 67 See PLS Ramboll (2002) and Andersson (2001).

Consumer Preferences Figure 11. Main Forms of Invoice Payment in Finland (1992-2004)
1992 2 1994 1999 2001 1/2003 10/2003 4/2004 10/2004 4/2005 0% 10%
Net bank

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7 9 10 23 34 53 16 2 14

42 30 20 3 17 57 60 64 20%
Direct debit

7 16 40 13 2 10 10 1 10 8 6 1 1 9 40% 50% 60% 70% 6 6 1 39 34

39 39 29 16 12 19 18 18 6 80% 13 90% 8 5 5 5 100%

30%
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

Undesired Invoice receipt channel Letter Email Text message Internet Form of invoice payment -29 -74 -31 -43 -21 -38 -10 -75 -50 -25 0 25 50 75 5 2 78 100 1 10 4 12 -3 16 72 Most desired

Counter services Auto paying machine Bank paying service Mobile -64 Net bank -100

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

Furthermore, research reveals that the traditional banking statement is still the most important tool for everyday financial management as 64% of consumers check the entries on their statements 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 preferences regarding 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 surprising outcome 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 Centre study 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, ove r 75% of the respondents consider regular mail more secure than email perhaps indicating one of the reasons 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 2001 showed some difference in the countries surveyed regarding media usage in the office environment. 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 the UK 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 consumer preferences 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, printed advertisements, radio, television, email, Internet and telemarketing. The Australian study (Figure 13) found that addressed letter mail is clearly the most desired channel 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 the message 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%), annual reports (77%), and explanations or changes to Terms and Conditions (82%).

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Figure 13. Preferred Media for Receiving Marketing Communications in Australia

60%

50%

40%

30%

20%

10%

0%
Em ail Ad d. M ail Te lev isio n Ne ws pa pe rs Ra dio M ail M ag az ine s Ad d. Ca tal og ue s Ca tal og ue s W eb site s

Source: Reaching Consumers in the Information Age, How Australian consumers prefer organizations to communicate with them, Australia Post (2003).

An almost parallel study by the Finnish Post that studied the channels consumers prefer to receive marketing communications showed similar results (Elkel, 2004b). The Finnish market research shows (Figure 14) that consumers have a clear preference for traditional mail when receiving marketing communications with the other available media playing a complementary role. Figure 14. Preferred Channel for Direct Marketing in Finland
60%

50%

40%

30%

20%

10%

0% Letter Email SMS Telephone

Source: Paper or Electronic? Desired and undesired reception channels for Direct Marketing. K. Elkel (2004b).

Un ad d.

Un ad d.

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Furthermore, the Finnish study showed that the consumers who choose letter communication as their 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 preference for email for advertisements has dropped from 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 similar results (Peppers and Rogers, 2001). As shown in Figure 15, mail was found to be a very valuable 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 best channel 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 perceived value of direct mail has increased by 10% since 1998, owing in part to its inherent transferability: 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 up to 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.
40% 35% 30% 25% 20% 15% 10% 5% 0%
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 our need 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 grocery purchases to be influenced by their next mail delivery (USPS, 2001). Further, 52% of households 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 also purchasing 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 their interests, 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 to foster my relationship with them68 % Strongly Agreeing 64% 58% 52% 60% 58% I am likely to continue doing business with them (Additional % reporting they will continue to buy from the provider if contacted by Direct Mail) 16% 13% 14% 11% 12%

Large Retailers Credit Card Providers Auto/home/life Insurers Financial Services National Charities

Source: Consumer Opinion Survey: Direct Mail As A CRM Tool, Peppers and Rogers Group (2001).

7. Consumer Research on Electronically-Enhanced Experiences

Retailers have much incentive to increase consumer spending. Research conducted by comScore on behalf of the USPS showed that higher levels of online engagement deepen a consumers relationship with the retailer (comScore, 2004). Further, the online shopping experience is enhanced by the receipt of paper catalogs. The comScore report indicates that maximum customer engagement, increased brand awareness and product familiarity can be achieved through the frequent and concurrent use of multiple shopping channels. Online purchases increase with the frequency of catalog receipt (Diakova, 2005c). At the same time, the InfoTrends/Cap Ventures study revealed that for some other applications (i.e., directories and newsletters) people clearly prefer electronic media (see Figures 1 and 2) (Info/Trends CAP Ventures, 2003). Further, even countries such as Finland typically considered as early adopters have a preference for paper document receipt. It should be noted that in comparison with the U.S. and Australia, the proportion of Finnish consumers preferring email as a receipt channel is still higher (Figure 16) (Elkel, 2004b).

68

350 U.S. adults with household incomes greater than $35,000. The higher income households are experiencing increasing direct mail volume, receiving at least 15 direct mail pieces a week (2001).

Consumer Preferences Figure 16. International Document Receipt Preferences

Australia 2003
Bills

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Finland 2003
Invoice and new offer Notification for payment on Met Notification for direct debit Invoices in general after 3-5 years

USA 1999-2003
Bills, Bank, Financial Statements ('99) Bills, Bank, Financial Statements ('01) Bills, Bank, Financial Statements ('03)
0% 10 20 30 % % % Paper mail 40 % 50 60 70 % Other % % 80 % 90 100 % % Email

Source: Elkel, Paper or electronic? Desired and Undesired Reception Channels for Direct Marketing, (2004b).

Several Pitney Bowes studies have found that the environment also plays a role in communications preferences. The studies found that email is the preferred communication method only in rigid environments (i.e., in the workplaces, which have specific rules that require the use of email) (Gallup Organization, 1998a, 1998b, and 1998c). However, the increased use of email versus other communication media that include paper- mail in the rigid environments implies that workers preferences towards media would not have changed as much if not dictated by company sanctioned rules. A 2003 ICR study (Figure 17) points to consumers preference to receive documents via regular mail while at home. Figure 17. Consumer Preferences: Regular Mail Versus email in the U.S. (1999-2003)
1999 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes
Access to email Preferences of receiving documents at home What is more secure?

2000

2003
Preference of receiving bills, bank statements

No

Regular E-mail Regular E-mail Regular Mail Mail Mail

E-mail

Source: ICR Household Mail Preference Study (2003).

A relatively older Institute for the Future study looked at messaging volume across various different media (telephone, voice mail, email, interoffice mail, regular mail, fax, pager, cellular phones, overnight express mail) for workers in the U.S., Canada, U.K., and Germany (1999,

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2000). This study, apart from finding the common work communication trends also highlighted some differences in these four countries (see Figure 18). In the 1999 to 2000 time period, the overall message volume increased in the U.S. (3%) and the U.K. (20%) while it decreased in Canada (9%) and Germany (1%). In the U.S. email was the most significant communication tool (in terms of volume of messages sent and received) while in the other countries telephone was the most frequently used with email being the second. It is interesting to note that the number of email messages sent and received followed closely the IT spending per capita figure showing the importance of technological availability as a driver of adoption. Figure 18. Percentage Change in Messaging Volume for Different Media
USA Canada UK Germany

60% 40% 20% 0%

-1% 0% 0% 0% 0% 0% 0%

-20%
Voice Inter-office Postal mail mail mail Source: Pitney Bowes Messaging Study, Institute for the Future (1999, 2000). Total messages Telephone Email

-40%

FAX

As can be seen in Figure 18, email in the workplace is surging while other media are slowly declining. It seems that as workers keep on adding more media to their toolkit they do not fully replace their old ones. Conversely, a 2003 study of Finnish habits conducted by Heikki Nikali and Kari Elkel found that despite the rise in communicatio ns media between 1995 and 2002, the only communication medium that experienced a significant decline in usage was the landline telephone. All other established communications media including letter mail and telefax experienced almost negligible declines in use when compared to the explosive growth of mobile phone, text messaging and email (Nikali and Elkel, 2003).

8. Research on Generational and Age-Related Trends

How important are age and generational effects when considering future trends? For the last three decades we have known that it is only a matter of time before young adults brought up in a world of new technologies will move into the mainstream of society and business. The argument has typically been advanced that, at that time, these young adults will replace all business paperbased transactions with electronics.

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Indeed, some studies have shown that younger consumers have less affinity for certain paper applications. Consumers aged 18 to 34 print a smaller proportion of their email and prefer to receive magazines in paper form less often than their older counterparts (InfoTrends/ CAP Ventures, 2003). However, as Figure 19 below illustrates, as children of all generations have aged, their mail receipt patterns are more affected by their life stage than their generational identity (Suczek, 2004). Figure 19. Generational Mail Usage Trends
Comparison of per HH Total* Mail Volume Relative to Average per HH Total* Mail Volume as Cohorts Age (*All Classes of Mail) Gen X (1) Gen X (2) Gen X (3) Gen X (4) Gen X (5) Gen X (6) Gen X (7) Gen X (8) Gen X (9) Gen X (9A) Gen X (10) Gen X (11) Gen X (12) Gen X (13) Gen X (14) Gen X (15) Gen X (16) Boom (1) Boom (2) Boom (3) Boom (4) Boom (5) Boom (6) Boom (6A) Silent (1) Boom (7) Boom (8) Boom (9) Boom (10) Boom (11) Boom (12)

Ratio of Age Group per HH Total* Mail Volume to Average per HH Total* Mail Volume

1.25 1.15 1.05 0.95 0.85 0.75 0.65 0.55 0.45 18-24 25-34 35-44 Household Age Groups 45-54 55-64

Source: Suczek (2005) using USPS Household Dairies 1987-2003.

Elkels study on financial document receipt preferences (Figure 20 below) also revealed that such preferences are independent of age. In the Future of Paper study, CAP Ventures looked at the general attitude towards paper of three age groups: 18 to 34, 35 to 54 and older than 54 (see Figure 21). Although the data did not clearly show a trend, the authors believe that there is an age difference in preference and, over time, there will be a downward pressure in print volume related to personal correspondence and financial documents. Younger people do not feel the need to print out personal correspondence as much as older people. Younger people also print out a slightly smaller portion of emails and have a stronger preference for receiving transaction documents (bills, statements, etc.) electronically than do older people. Surprisingly, the study also found that the 18 to 34 years old group receives less email per week; those 35 to 54 years old and those 55+ receive 23% more emails. Once again, this shows that communications volume is still firmly tied to life stage, not generation. The study further concluded that, despite rapid advances in technology consumer behavior evolves more slowly.

Consumer Preferences Figure 20. Preference for Invoices in Finland by Age Group
Letter 81-65 50-64 50-64 35-49 25-34 15-24 Email 81-65 50-64 50-64 35-49 25-34 15-24 SMS 81-65 50-64 50-64 35-49 25-34 15-24 Internet 81-65 50-64 50-64 35-49 25-34 15-24

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Undesired
-1 -5 -2 -3 -2 -31 -35 -25 -18 -35 -75 -69 -78 -75 -71 -54 -37 -29 -19 -23

Most desired
90 74 72 60 6 15 16 21 17 0 1 1 1 2 4 11 10 69

17 12

-100

-50

50

100

Source: Kari Elkel, Invoices and the consumer, 2004a.

Figure 21. Attitude Towards Paper Across Different Age Groups (U.S.)
18 to 34 35 to 54 55+

60% 50% 40% 30% 20% 10% 0%

% of emails printed

Frequency of printing emails (% regularly)

Frequency of printing transaction documents (% regularly)

Preferred method of receiving transaction documents (% paper)

Source: The Future of Paper, CAP Ventures, 2003.

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While some studies have indicated that younger households have a stronger preference for electronic bills and statements (ICR, 1999, 2001, and 2003), their preferences are not completely reflected in their actions. However, in these studies the age of the interviewees did not seem to play a significant role in the responses for some paper-based applications, while in others, the younger group seemed to prefer electronic media. Those in the 18- to 34-year old group had almost the same or higher preference for paper (catalogs, direct mail) as those aged 35 to 54. Older respondents also tended to have a much higher preference for printed newspapers. Surprisingly, perception of security by age has not changed in a significant way from 1999 to 2003, although younger households have a stronger preference for electronic bills and statements. The 2003 study however, found a gender-based difference with men trusting email at double the rate of women, or 16% vs. 8%. The apparent preference of younger people for electronic bills and statements is also corroborated by the USPS study (USPS, 2001). USPS found that online bill payment among those younger than 30 is almost double that of those in the 30-39 year old age group and that younger consumers simply tune mail out. A study on EBPP by Forrester also showed that those who pay bills online are, on average, 2 years younger than those who do not pay bills online (Forrester, 2004a). One reason for the difference in EBPP usage is that age is a strong indicator of online security concerns. Both Seniors and Baby Boomers cited security concerns as their reason for non-adoption 50% more often than Millennials (Forrester, 2004b). It would seem contradictory that a 2003 Forrester report on EBPP growth rates which revealed that between 2001 and 2002, households comprised by GenXers and Millennials increased their EBPP usage by only 11.8%, as compared to the over 30% growth rates of elder generations (2003). This apparent discrepancy may be explained by the fact that as groups, both Seniors and Baby Boomers are economically active, whereas Millennials are not yet. One has to wonder whether entry into the business world creates a new set of relationships and paradigms that cause younger generations to adapt to traditionally trusted ways of doing business and conducting relationships. While plenty of opinions abound on this issue, more objective and quantitative research is needed into these behavioral patterns than we have available today. A college students study on the differences between Instant Messaging (IM), email, cell phones, and text messages on phones found each media has its own rules and customs. IM is the preferred method to communicate with friends while email is for the parent (Business Week, 2004). In spite of the wide range of communications media available to them, young peoples affinity for receiving postal mail has not waned. A 2004 presentation of the Henley Centre study of Royal Mail showed that 60% of 16-34 year olds agreed with the statement, I enjoy going through my post (Spong, 2004). While there seems to be a preference for electronic bill payment and electronic communications, young people still relish the experience of receiving postal mail. As difficult as it may be to predict future consumer behavior, there are some initial indications that younger people have a stronger preference to electronic media than older people. However, the age related studies suggest that the difference in preferences is not dramatic but only evolutionary, as technology in the 20th -21st century has perhaps been advancing for the first time in history faster than the humans ability to adopt it.

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Many writers, especially in the popular press, have claimed that traditional attitudes and ways of dealing with paper and mail are about to disappear because of impending generational changes. Our analysis (Suczek, 2004) shows that there is yet no discernible effect of generational factors in mail use. Harper and Shatwell (2003) also come to a similar conclusion when examining the thesis that, when generations that were not brought up with computer screens retire, paper will quickly disappear. They find that there is very little relationship between age cohort and preferences for paper, mostly because paper is valued as a form of interaction among colleagues that cannot today be replicated with electronic means. 69 The question then becomes what will the next generations (i.e., the Millennials) preferences be? Are they likely to significantly shift the general preference of the population towards electronic media? (As the Millennials were those born after 1982 2002, only a small percentage of this generation was included in the 18 to 34 age group of the previously mentioned market studies.) The Millennials represent roughly 30% of the U.S. population and are the first generation to grow up with computers (Howe and Strauss, 2000). In 2002, 95% of children between the ages of 5 and 17 had access to and used computers compared to only 60% of U.S. adults. The Millennials are technologically savvy, very receptive to new ideas and technologies, and enjoy passing on information to friends. However, Internet based activities are done at the expense of sports, outdoor activities rather than reading and watching TV (Attewell et. al., 2003). As a matter of fact, young adults who use home computers less than eight hours per week spend significantly more time reading at home than do students without computers. After a targeted advertising campaign by Royal Mail, a 2001 study of consumer impressions of postal mail revealed that 59% still believe that mail is a relevant form of communication. The same portion believe that mail gives them access to the entire marketplace, and 46% believe that letters are a vital point of contact with customers. Mail is perceived as a superior vehicle for specific communications purposes like special occasions and greetings over and above other communication technologies.

9. Conclusions
Research has shown that consumers who prefer paper do so for reasons that are not directly opposite to the reasons given by those who prefer electronic communications. An article published in 1998 by the Institute for CyberInformation quoted Everybook founder, Daniel Munyan as saying, What a computer does best, a book cannot do; and what a book does best, a computer cannot (Munyan, 1998). Markability and comparability may be given as reasons for continued paper usage, even though studies show that people do not mark or compare papers

69

In our ongoing private conversations with leading researchers in this field, the sponsors have learned that some organizations are now exploring more deeply whether advances in computer displays not currently available may change this pattern in the future. One such study involves observing young college graduates in a simulated office environment to discern if new interaction patterns arise. In the meantime, however, it appears that recent graduates who are extremely computer savvy adapt quickly to the present work environment where much interaction still takes place face-to-face and using paper.

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often enough to explain the continued use. In the office, total paper usage continues to soar as workplace and portable (i.e., PDA-based) email surges. Security and privacy concerns appear to be a significant stumbling block that prevents many who have not yet adopted online bill payment from ever adopting it. Nearly half of consumers that do not pay bills online avoid doing so for this reason. Some studies seem to indicate that younger consumers have a preference for electronic media for correspondence and bill payments, though a Finnish study showed no strong age-related preference for electronic receipt of invoices. Indeed, many of these behaviors may change as the Millennial generation comes of age. They are a generation that has grown up with computers and the Internet, and it is expected that their preferences will greatly influence the workplace. However, until electronic media can replicate the attitudinal and social affordances of paper, electronic media will continue to enhance and complement paper transactions and experiences. The same resilience that applies to paper media carries over to mail. Its affordances are difficult to replicate in an electronic world and this explains consumers' adherence to mail. 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 as speed and reliability, price, content, shape and weight. One prominent researcher suggests that consideration of a richer set of affordances may point the way to properly assessing mails value 70 . Mail is a channel for summoning and answering, sharing knowledge, documenting and informing, giving and receiving, providing proof of a fact, recording the beginning or end of a transaction. It is these affordances that will make mail a valuable channel for a long time.

70

These ideas were shared by Harper (2005) at a recent industry meeting.

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References71:
Andersson, P. (2001): Deregulation and Internet. The Ascent Group (2004): Billing & Payment Profiles & Best Practices, August. Attewell, P., Suazo-Garcia, B. and Battle, K. (2003): Computers and Young Children: Social benefit or social problem? Australia Post (2003): Reaching Consumers in the Information Age; How Australian consumers prefer organizations to communicate with them. Bauman, Richard and Sherzer, Joel, ed.: Explorations in the Ethnography of Speaking. Cambridge University Press, 1989. BBC (2002): Digital Domesday book unlocked, December 2, at http://news.bbc.co.uk/2/hi/technology/2534391.stm. Bellis, M. (2005a): The History of the Cathode Ray Tube, at http://inventors.about.com/library/inventors. Bellis, M. (2005b): The History of Television, at http://inventors.about.com/library/inventors. Bellis, M. (2005c): The History of Radio, at http://inventors.about.com/library/inventors . BIG Research SIMM survey (2003, October), http://www.bigresearch.com/briefing/big-mediacenter.htm. Brand, S. (2000): Written on the Wind, Civilization, Oct/Nov. Britannica, Encyclopedia, at www.britannica.com. Burton, G. (2004): The secret of long life, November 17, at www.infoconomy.com . Business Week (1975): The Office of the Future, June 30, p. 48-82. Business Week (2004): Online Extra: Reaching the Connected Generation, July 12. Book Information Website, at http://historymedren.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=historymedren&zu=http%3A%2F%2Fwww.x s4all.nl%2F%7Eknops%2Ftimetab.html. Burton, G. (2004): The Secret of Long Life, November, at http://www.infoconomy.com/pages/strategycolumn/group101451.adp. Chopra, V. (2004): Millennial, Paper of the Future of Documents project, July. Internal Pitney Bowes publication, Futures Strategy. Chopra, V. (2005a): The Emergence of Electronic Alternatives, A Pitney Bowes Background Paper for the project Electronic Substitution for Mail: Models and Results, Myth and Reality, www.postinsight.pb.com. Chopra, V. (2005b): The Internet and Mail, A Pitney Bowes Background Paper for the project Electronic Substitution for Mail: Models and Results, Myth and Reality, www.postinsight.pb.com.

71

A number of references below allude to the Pitney Bowes Background Papers for the project Electronic Substitution for Mail: Models and Results, Myth and Reality. They will be published at www.postinsight.pb.com as their final versions become available to the public. The authors have benefited from reviewing drafts in progress for each of the papers cited.

Consumer Preferences
ComScore (2004): USPS Multi-channel Catalog Study, April 12. Commissioned by USPS. Davidson Consulting (2001): Worldwide Fax Machine Report 2001, at http://www.researchandmarkets.com/reportinfo.asp?report_id=437&cat_id=112 accessed on 1/28/05.

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Diakova, E. (2005): Electronic Alternatives and Direct Mail Marketing, A Pitney Bowes Background Paper for the project Electronic Substitution for Mail: Models and Results, Myth and Reality, www.postinsight.pb.com. Digital Dark Age: at www.shift.com/content/web/385/1.htm l. Elkel, K. (2004a): Invoices and consumer, Finland Post Corporation. Elkel, K. (2004b): Paper or electronic? Desired and Undesired Reception Channels for Direct Marketing, Finland Post, address at the 12th Conference on Postal Delivery and Economics, Rutgers University, Center for Research in Regulated Industries, Cork, Ireland, June 2-5. Elkel, K. (2004c): Senders and recipients of the invoices, Finland Post presentation at the Pitney Bowes Roundtable on Electronic Substitution, Cork, Irealnd, June 1-2, 2004. eMarketer: Online Selling and eCRM, August 2004. EMGE & Co. (2003): Office Paper Demand Trends. Encarta, Encyclopedia: at www.encarta.msn.com . Evergeti, V. (2000a): A Review of the Anthropological Literature on Letters, University of Surrey, Digital World Research Centre. The First Typewriter: at http://home.earthlink.net/~dcrehr/firsttw.html. Flynn, S. (2001): The History of Paper: a Review of the Literature, Pitney Bowes, Futures Strategy paper. Flynn, S. (2005): Bill Payment and Presentment, A Pitney Bowes Background Paper for the project Electronic Substitution for Mail: Models and Results, Myth and Reality, www.postinsight.pb.com. Forrester (2002): How Consumers Use Their Free Time, August 21. Forrester (2003): EBPP Forecast: Annual Growth Rates To Slow, November 12. Forrester (2004a): Online Bill Pay 2004: Understanding the Mindset of Holdouts, Fence-sitters, and Quitters, September 22. Forrester (2004b): The Dirty Little Secret About eStatement Adoption, December 7. Forrester (2004c): Marketing to Consumers: The Changing Landscape. November 22. The Gallup Organization (1998a): Pitney Bowes-USA Communication Method Usage. The Gallup Organization (1998b): Pitney Bowes-UK Communication Method Usage. The Gallup Organization (1998c): Pitney Bowes-Canada Communication Method Usage. Garland, K. and Noyes, J. (2004): CRT Monitors: do they interfere with learning? Behaviour and Information Technology. Vol. 23, Issue 1, Jan-Feb. Global Business Network (GBN) (2004): Is Demography Destiny? by Chris Ertel. GBN Worldview Meeting Report, March.

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