US Newspaper Titans Forge Online Advertising Partnership
With circulations falling and ad dollars migrating online, a quartet of media players’ band together to leverage their new-media advertising assets…
“In the latest example of traditional media players allying in the face of shrinking print fortunes, four companies have formed an online sales organization to sell national advertising across all of their Web sites…”
New York — Facing an industry wide decline in newspaper advertising sales, four of the biggest US news organizations, including the New York Times Company and Tribune Co., have launched an online advertising network that will let advertisers’ book national campaigns through a single point of contact, reaching 50 million people a month across the U.S., the groups announced Friday.
“Hearst, The New York Times, Tribune Co., and Gannett launched quadrantONE to sell online ads for almost 200 Web sites.”
The new venture called “quadrantONE” is backed by the Times; Tribune Co., which publishes the Los Angeles Times and Chicago Tribune; USA Today publisher Gannett and the Hearst Corporation, which owns the San Francisco Chronicle.
The new ad network will let advertisers buy space on more than 170 newspapers and broadcast Web sites of its four partners Gannett Co., Hearst Corp., the New York Times Co. and Tribune Co., without having to negotiate individual deals, the companies said today in a statement.
The network will reach more than 50 million monthly unique visitors in 27 of the top 30 markets, including New York, Los Angeles and Chicago, according to the network, citing Nielsen Online figures.
Combining sales forces may help newspaper publishers sell more national ads and boost revenue from their Web sites as advertisers shift money away from print publications to the Internet. The venture will be “very complementary” to partnerships some of the publishers formed with Yahoo! Inc., Dana Hayes, Interim CEO of quadrantONE and SVP for sales of Tribune Interactive, said in a statement.
“By aggregating the online audiences of quadrantONE’s participating media companies, large national advertisers can immediately access tens of millions of unique visitors in the country’s top markets,” Hayes, said in a statement.
The venture hopes to entice “premium advertisers” seeking to reach a broad national audience of potential customers.
By teaming up, the four hopes to better compete with national portals for online advertising by serving up online audiences of local and national newspaper and broadcast sites.
“Each participating company has agreed to dedicate advertising inventory to quadrantONE, so the network can offer customized online campaigns on a highly competitive basis.”
“The move positions the papers to compete with online ad sales dominated by Google and recoup some advertising losses to new media.”
“Imagine placing the same ad across hundreds of local Web sites on the same day with one buy, that is the power of this network,” Hayes said.
The network covers markets including New York, Los Angeles, Chicago, San Francisco, Boston, Atlanta, Houston, Phoenix, Detroit, Dallas, Philadelphia, Washington, D.C., Baltimore, Cincinnati, Denver, Minneapolis/St. Paul, Orlando, San Antonio, Sarasota, Ft. Lauderdale, San Jose, and Albany, N.Y.
The venture’s backers said it would enable media companies to compete on a national scale with giant online Internet portals such as Google and Yahoo in the competitive quest for lucrative advertising revenues.
The media firms own a stable of properties aside from their flagship publications spanning newspapers, the Internet, radio and television.
“The big problem for all newspapers that have a metro focus is being able to sell national ads,” Norman Pearlstine, managing director at Carlyle Group, said in an interview with Bloomberg Television. “This is the kind of consortium that makes absolute sense for a troubled industry that is trying to compete with new people like the search engines.”
Pearlstine, a former Wall Street Journal managing editor, advises on media and communications acquisitions at Carlyle.
quadrantONE is designed to address the competitive problem that newspaper Web sites face in attracting major advertisers. If Procter & Gamble is launching a nationwide interactive campaign to sell Tide, for instance, it makes more sense to go to a single ad-placement network to reach a major portal than to broker individual deals with newspapers’ sites in all the major markets throughout the country.
“For the first time, the media industry will be able to compete effectively for advertising dollars currently going to the national portals and others,” Jack Williams, president of Gannett Digital Ventures, said in a statement.
“quadrantONE’s audience is of the highest quality. By networking our Web sites, we have delivered — in one stroke — the reach and scope desired by national advertisers.”
Chris Boothe, president/chief activation officer at Starcom USA, said advertisers want new models for providing a valuable, measurable consumer experience in an increasingly fragmented market.
Lincoln Millstein, SVP for digital media at Hearst Newspapers, said it is the first time the company has been able to offer advertisers the “aggregated inventory of our prized content categories such as health, business news, technology, sports, auto news and personal finance.”
quadrantONE would not sell ads for the New York Times’s flagship newspaper and Gannett’s USA Today, the biggest U.S. newspaper. quadrantONE will start with 17 employees, primarily in sales, and have offices in New York, Chicago and Los Angeles, said spokesman Michael Frenkel.
“As hard and as great of a sales effort that you put together on your own, you are missing the key to the Internet, which is scale,” Hayes said.
The venture will concentrate on display advertising rather than sell ads tied to search results or classified ads as Yahoo does, said Peter M. Zollman, founder of Altamonte Springs, Florida newspaper consulting firm Advanced Interactive Media Group.
“It is another way to sell ads,” Zollman said. “I do not think this will be a significant financial driver for newspapers.”
Across the industry, newspapers have been pummeled by declining circulations and the flight of ad dollars to online media. Earlier today, The New York Times announced that it was eliminating 100 newsroom jobs, following similar cuts made at newspapers around the country.
“The U.S. newspaper industry is in dire straits, in part because of a bumpy U.S. economy, declining print readers and falling print advertising revenue.”
Critics argue that newspaper companies waited far too long to revamp their businesses with the surge in online publishing and advertising over the last 15 years.
Companies such as Google, which has made a fortune in Web-based advertising, have reaped some gains at the expense of newspapers, as advertisers look for cheaper and more targeted ways to reach buyers.
Classified advertising, once a bread-and-butter source of revenue for newspaper, has also declined over the years due to advertising boards such as Craig’s List.
The alliance marks the latest example of traditional media eschewing old rivalries and banding together to build scale online as readers and advertisers flee to the Internet and print ad revenue and circulation contracts.
“This is to sell rich media, video and all the other things that are premium display ads,” Gannett spokeswoman Tara Connell said in an interview. “The whole game is to unite sites so an advertiser can place ads with one phone call.”