It seems the underlying assumption to advertisers here is that junk mail has a higher conversion rate than junk email. And that may very well be the case - anec

It seems the underlying assumption to advertisers here is that junk mail has a higher conversion rate than junk email. And that may very well be the case - anecdotally, you'll have more eyeball-time on that colorful supermarket ad lying on your counter than you will on an email-like message that you'll immediately delete. And additionally, there's the coupon use case which allocates existing customers' interest to overstocked items. Coupons can go digital, of course, and you can surface ads in a Gmail-like interface, but there's a chicken-and-egg problem: until the average shopper replaces their entire remember-to-go-shopping workflow with a digital one, there will still be utility from physically delivered coupons and advertisements. I'd even argue that at a national scale, junk mail promotes consumer spending (vs. saving) in an economically significant way by alerting people to limited-time offers. So even if the Post Office were to operate digitization and digital delivery themselves, and access all of the revenue from hosting digital advertisements, if the assumptions above are correct, it would be the "same slice of a smaller pie," since conversions could drop in aggregate. They serve an orthogonal segment of the advertising market from the Googles of the world; it would be like leaving your own perfectly-huge sandbox untended to go play in another kid's, and only get a small corner of it. Even if they weren't federally mandated to have the capacity to deliver mail to any address, it wouldn't be in their interest business-wise UNLESS those assumptions above are changed dramatically.