Media Buyers Cheer Web Plan by Big-Three Newspapers

But Open Network No 'Silver Bullet' to Solving Online Buys

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CHICAGO ( -- Media buyers are welcoming two in-development online advertising networks from the nation's largest newspaper publishers. This week, details began to emerge about a partnership between the three largest newspaper publishers -- Gannett Co., Tribune Co. and McClatchy Co. -- to offer up 10% of their online ad space to a so-called open network. A rival effort, led by MediaNews Group and Hearst Newspapers, is teaming up with the online portal Yahoo on a similar effort.
Plans for the big three's 'open network' are still in the formative stages, according to the companies.
Plans for the big three's 'open network' are still in the formative stages, according to the companies.

Ad buyers and planners said they expected the new efforts to simplify the arduous, time-consuming and labor-intensive process of buying broad groups of local newspaper websites for national advertisers, an inconvenience they've long groaned about. And they expected that the competition between competing newspaper entities (not to mention the large online portals such as America Online and Google) to lead to a much-welcomed price war.

"It won't take 10 conversations to buy 10 newspapers anymore, so that's good," said Brenda White, VP-director of print investment, Publicis Groupe's Starcom Worldwide. "But I don't view it as a silver bullet."

'Still behind magazines'
Ms. White said the planned networks will likely ease concerns about efficiency and cost that buyers feel when purchasing newspaper-website ads. But she also said the systems won't do anything to address concerns she and other buyers share about the state of many newspaper's brands, which she says are a poor fit for many clients. "They're still behind magazines there," she said.

A McClatchy spokesman declined to comment. In a statement, a Tribune spokesman confirmed "active discussions with Gannett, McClatchy and others about creating an online national sales network," which he said were in the "formative stages."

A Gannett spokeswoman, however, pointed to a little-noticed-at-the-time December speech by Gannett CEO Craig Dubow that outlined the project.

"The goal is to create the largest network of newspaper-developed local sites for any advertiser to reach local consumers," Mr. Dubow told Wall Street analysts last month. "However, unlike past efforts in the industry in print or online, we need a network focused on customer needs, so business rules will include guaranteed inventory availability, standard pricing and simple billing."

Failures in past
Though newspapers generally have better local-market penetration than their online rivals, their past efforts at online national ad-sales networks have failed, either because the individual publishers' holdings weren't broad enough to offer a true national ad buy, or because of a failure to offer standardized ad units and guarantee run times.

Infighting was also a concern. "We were constantly being undermined by the big publishers," said James Warwick, who ran the Internet Press Association, an online newspaper-ad network launched in 1998 that folded last year. He said publisher-backed ventures such as the late Knight-Ridder's Real Cities network of sites would consistently undercut the prices he offered to national advertisers, devaluing his inventory -- and theirs. "The pricing was destructive."

Rival group
Mr. Warwick sees potential for more damaging inter-paper squabbling in a rival consortium of major publishers that is teaming with Yahoo to offer its own online advertising network. That group includes Hearst Newspapers, MediaNews Group, E.W. Scripps Co., Lee Enterprises, Belo Corp., Cox Newspapers, Morris Communications and Journal Register Co. One reason that group came together was to respond to concerns that the largest three publishers were raising fees they charged to be part of the CareerBuilder job-ads network they co-own.

Even with the potential squabbling, however, media buyers said they will welcome any steps the newspaper industry makes toward becoming more advertiser-friendly. "To date online, they've been providing regional solutions to a national-advertising world," said Jeff Lanctot, VP-general manager of Avenue A/ Razorfish. "It's good to see them thinking about big, scalable solutions."
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