So that’s one strategy we have. But postal fusion is using the same equipment that we use for Co-mailing. So we already have a huge installed base to ramp this, and it’s — like we said, it’s instead of making bundles that are in the sortation that the postman walks down your street and him stopping at your store and dropping each one singularly to you; in that bundle, you may have multiple titles, and so we’re wrapping those. And so, yes, it’s been very well received, and it’s rolled out. The first rollout has been with publications and then we’ll migrate to catalogs. And one day, we’re working with the post office on this, be able to merge catalog and publication together in one package, including potentially direct mail. And so this is another story of the more the merrier, creates even more savings.
So 10 to 20 is like sort of the starting point, but offsetting that postal increase is really important. Now, the other strategy, though, keep in mind, and that’s why I liked being able to bring back examples of accounts we won, because it’s one thing to win and it’s another to show that our approach is not just producing the content for them, it’s making the content more responsive. And so cost is always offset the best by having an increase in response rate for your marketing spend. And so, while I’m providing a mechanical sort of direct cost offset in getting mail into the post office, we’re also using our data stack and all our analytics to work with our clients to increase response rate. You don’t have to increase response rate of mail that much to offset the increase.
And so that’s why I was excited. And we will continue where our clients allow us to share the data. We will continue to share it, not only examples of winning, but then examples of what winning did, because, again, our whole approach at Quad is, yes, to produce content efficiently and distribute it, no matter what channel, but the bigger strategy is to help our clients win by using data at the center of the whole conversation to drive responsiveness of those media assets.
Kevin Steinke: Okay, great. That’s helpful. You mentioned the pressure being applied to the Postmaster General from all different angles there. But at this point, I think you had talked about previously, the postal service planning another rate increase for July, I believe. Is that still on the table as far as you know? Or what — any update there I guess?
Joel Quadracci: Yes, it’s still on, and we’re assuming it goes through. There are a lot of questions around it on whether or not it’s appropriate or it should be delayed. But right now, they have the authority to do it. And so we were planning for that. So the rollout of our Household Fusion is really well timed. And I think different than last year, this is really important because if you look at our year-over-year first quarter revenue being down, remember a big chunk of that is because in the first quarter last year, we hadn’t hit that second increase they did in July. And no one really had that in their budget at the time. So that’s where we saw a pullback because of that postal volume. If you don’t have it in your budget, it’s your biggest cost.
You’ve got to mail a little bit less for a while. And so what’s different this year is people are aware of it. Therefore, they’ve been contemplating it through budget season. So far, we’re keeping a very close contact with our clients to see what they’re going to do. But we are, I’d say, cautiously optimistic that people are managing through it, but we will stay close. And so that’s — again, as you get closer to the increase, there’s lots of factors that come into how our customers decide how much to mail. It’s not just postal, it’s also what’s the economy doing? And so — and how is the consumer responding? But that’s the big difference between this postal increase and the one last year.
Kevin Steinke: Okay, great. Understood. I believe last quarter, the fourth quarter conference call, you had mentioned perhaps some signs of increased demand coming back from your financial services clients. I know there’s been an impact there from the higher interest rates, but maybe any update on spending trends you’re seeing there from your clients in the financial services space?
Joel Quadracci: Yes, I think there’s — it’s kind of a mixed story. I’d say, if you’re associated with personal lending and things like that, probably still a little bit slow, but we’re seeing others start to put their toes back in because ultimately, you still have to market and you can stop for a while. But realistically, I think depending on how the markets evolve here, people will start sticking their toes back in. And so we’re seeing activity from that standpoint, which is a good sign.
Kevin Steinke: Okay, great. I also wanted to ask about Rise and just maybe delve into — you talked about it on the call, but what differentiates that agency offering and what you expect to gain from it in the marketplace?
Joel Quadracci: Yes. So Rise is our — Rise Interactive previously was our digital agency, which worked with our clients for placement of digital media. But at Quad, we also have media in other areas. So traditional media, we buy a lot of media on behalf of our clients in traditional media. And then separately, first of all, Rise Interactive also uses a ton of analytics and data to help with that digital offering, but we also have a ton of data analytics and data stacks in other places of the company. And so ultimately, we’re an integrated company, and as we’ve developed these things, each one has kind of matured. The next step is that data needs to be in the center of all media because it’s about making sure you’re sending the right message to the right person at the — right product at the right time, but also in the right sequence across the media landscape.
And so we’ve combined all that together, not only Rise, but the other assets we had as part of that total media offering. So think of it as Rise now as the — is the umbrella for all those things with data at the center to drive what we do for our clients on the media side to get more bang for their buck and increase responsiveness out of that media spec.
Kevin Steinke: Okay, makes sense. And I guess lastly here, I wanted to ask about, Tony, the asset sales. So the asset sales, I think it was — you had $23.9 million on the slide for 2024. That’s just what’s occurred thus far, and you would expect more this year. Is that the way to read that?
Anthony Staniak: That’s correct, Kevin. We’re going to update that as we go along, the timing of asset sales, such as selling a building, is sometimes hard to predict. So we’ll just update that as we go along. It includes the $22 million from the sale of Manipal that number. And then in the first quarter, we sold about $2 million of equipment. So that’s what that number is made up of.
