NEWSPAPERS;NEWSPAPERS PLUG ALONG IN QUEST FOR WEB ANSWER:WITH $100 MIL IN AD REVENUE AT STAKE, PUBLISHERS SEEK PARTNERS IN BUILDING SITES

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Publishers are flocking to the World Wide Web like gold miners to the hills, chasing the promise of a vast, but so far elusive vein of $150 million in advertising revenue.

Proof of the rush can be seen in the doubling of the number of U.S. newspapers on the Web to 200 from 1995 and 15 more with online only or online Web titles as of this month, according to Newspaper Association of America. Internationally, about 750 publications are reported to be either online or on the Web.

SMALL PROFITS

Nonetheless, profits averaged less than $50,000 each for 395 newspapers surveyed this year by interactive consultant Kelsey Group.

The prize is not just fool's gold for newspapers that can put together a business model that balances advertising, premium pricing and revenue streams such as content syndication.

This year newspapers are taking advantage of collaborative marketing efforts that will bring in more revenue than what they can earn alone.

Advertisers spent $50 million online in 1995, says James Kennedy, VP-publishing at WebTrack Information Services. He predicts that figure will triple to $150 million or more this year.

He credits the big jump to continued growth of PC penetration in homes; growth in online service and Internet access service use and growth in marketers' confidence in the medium.

Print brands, including both newspapers and magazines, get less than 10% of that advertising total, says Mr. Kennedy. That means, if trends continue, those hundreds of papers could share less than $15 million in interactive ad dollars.

Still, newspapers have distinct advantages including brand recognition or dominance in a local market, a diverse audience and major content resources.

Newspapers already are developing innovative programs for advertisers.

TIMES PARTNERSHIP EFFORT

For example, New York Times Electronic Media Co., which launched The New York Times on the Web (http://www.nytimes.com) in January, is running partnership programs to research effective interactive marketing along with advertisers.

In addition to its general online advertising, the Times has signed Kraft Foods' Maxwell House coffees, Toyota Motor Corp. and Chemical Bank as charter partners, for $120,000 each per year.

Other brands have taken interactive ad creative in-house to facilitate business with local advertisers. Advance Publications' New Jersey Online (http://www.nj.com), for example, launched its site with in-house agency Journal Square Interactive to handle clients such as Nabisco Direct.

Partnerships that position newspapers as syndicated content providers may be the "make-it" or "break-it" factor for how the publications fare on the Web. Access providers such as the Baby Bells and regional telecommunications companies will need information content to bolster their services, says Marsha Stoltman, Kelsey VP.

Models for syndicating content is spreading among newspaper brands, says Ms. Stoltman, who expects that niche to grow in 1996.

LOOK TO BELLS

"In my mind newspapers should be looking at the local Bells, asking `Could there be a partnership?' Newspapers have always liked to do their own thing, to breathe as standalones. Now they'll have to think more about partnering," says Ms. Stoltman.

Of course, partnering with other content providers for event-centered sites also continues to grow.

For example, The Augusta (Ga.) Chronicle and Sports Illustrated paired up to offer Masters96 (http://www.masters96.com) and handled coverage of The Masters annual golf tournament.

The Atlanta Journal & Constitution snared AT&T Corp. as a sponsor for its Atlanta Games site (http://www.atlantagames.com), which provides the Olympics-bound traveler with local and game information as well as international news reporting from other newspapers.

National groups are pumping dollars into online papers. Newspaper National Network, which represents national ad categories, will bring its services to interactive marketers by July 1.

SET PRICING

NNN will offer interactive marketers both the one order/one billmodel and the 2 cents-per-impression pricing that brought print newspapers $30 million in new national advertising last year.

New Century Network-with members such as Cox Communications, Hearst Corp., Times Mirror Co. and Times Co.-is expected to announce a unified marketing strategy that assures buying across member companies' Web newsbrands, regardless of market size.

Though NNN and NCN are unaffiliated, they're working to support the two sides of the Web-marketing coin.

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