Could a Broad Scale Network Rope In National Advertisers?

  |  August 7, 2006   |  Comments

Newspaper publishers must evolve to survive. An industry-wide online ad network just might help the industry last into the next era.

The growing online newspaper audience may be cushioning the blow of shrinking print readership, but paper publishers are learning that merely being online isn't enough. What they'll really need to survive is something they may not enjoy: teamwork. The Newspaper Association of America (NAA) and others are working to get the whole industry to band together.

In order to really get in the online ad game, newspaper sites need to attract national advertiser dollars. Online heavyweights like USAToday.com, The New York Times and WashingtonPost.com may have little trouble wooing big name brands. However, many in the industry agree that the rest of the newspaper sites out there would do well to form a far-reaching network to simplify media buys for national advertisers.

The fact is big portal sites and ad networks make it relatively easy for advertisers to target ads locally, so why should media buyers bother dealing direct with The Wee Town Daily Bee? Most don't. And despite large ad networks carrying newspaper inventory, media services like Centro, and small networks like Real Cities and the newly-launched Suburban Newspapers of America Online Network, there remains a need for an one-stop online newspaper buying solution.

A Network in Shining Armor?

"Impossible." That's what one media agency exec called the process of buying ads on newspaper sites. Barring publishers he called "thought leaders" such as The Wall Street Journal Online, The New York Post Online and Tribune Interactive, online papers have had "endemic issues" that have made it "highly problematic" for media buyers to place ads on their Web properties, he complained. From ad terms, rates, and sizes to campaign management, customer service and accounting, the entire ad sales infrastructure is "hamstrung" by the industry 's traditional ways, insisted the industry insider, who asked to remain anonymous.

"Overall, the powers that be recognize they need to make online newspapers easier to buy for advertisers," said Randy Bennett, VP, audience and new business development for the NAA. "We believe that given an easier way to buy newspapers we can capture a greater share of advertiser dollars."

The NAA, which represents 2,000 daily and weekly U.S. and Canadian newspapers, is working to make that happen. In addition to developing other newspaper-promoting initiatives, the group's Marketing Advisory Committee has begun reviewing ad management technologies for what it hopes to be the kind of large online newspaper network that could rival the likes of Advertising.com and ValueClick. The effort is being led by senior advertising executives from member publishing firms.

The network initiative is "pretty embryonic," admitted Bennett. At this stage, the committee is focused on "developing a common ad serving platform that would make it easier to place ads across newspaper markets," he explained.

The NAA noted last week in its Q2 report that the number of newspaper site visitors has risen nearly one third since Q2 of last year, up from an average of 42.5 million to almost 55 million users per month. A <"http://www.clickz.com/showPage.html?page=3611141">report released in June by the trade organization showed that online newspaper ad spending jumped almost 35 percent to more than $613 million in Q1 2006 compared to Q1 2005.

However, even taking into account the continuing growth of the online newspaper audience, the industry is facing a steady decline in overall newspaper readership. A recent report from Pew Research Center for the People and the Press showed the number of Americans who reported reading a newspaper the previous day has shrunk about 10 percent in as many years.

Make It Big or Don't Bother

Scalability is key. National advertisers want broad reach, and that's what they get from the portals and the big ad networks. In order to be viable, the newspaper network should encompass all newspaper sites, from the large daily metros to the alternative weeklies, suggested the unnamed media exec. Were that the case, he said, "all the unique users on all the newspaper sites would dwarf Yahoo, MySpace and MSN."

Newspaper sites "have tended to completely miss out on [a scalable network]," believes Tom Mohr, former Knight Ridder Digital president and future director of the new media innovation lab at Arizona State University. "Everything about the Web is about scalability," he added.

In addition, Mohr sees a need for a common ad management platform, noting that when he was with Knight Ridder Digital, placing ads in its Real Cities network on non-Knight Ridder sites required checking for available inventory on a site-by-site basis. Knight Ridder was acquired by The McClatchy Company earlier this year.

The NAA's Bennett also agrees that the bulk of the industry needs to be involved in order to achieve necessary scale. According to a 2004 NAA report conducted by MORI Research, there were more than 1,500 North American daily newspaper sites as of May 2004.

"If the last few years are any indication, splintering the industry hurts everyone. Bringing everyone together gives everyone a chance to compete on a national level," concluded Shawn Riegsecker, president of Centro, a media services and technology company that facilitates ad buys on almost 3,000 local newspaper, TV station, sports, business and community sites.

"We believe it's [the newspapers] versus the portals," Riegsecker continued. He commends the NAA for its network initiative, and he'd like to assist the trade group in its platform development. "There's no need to reinvent the wheel," he commented, noting that Centro is refining its ad management platform in a mission to make "geo-targeting on local newspapers as easy as it is to geo-target on a portal," by the end of the year.

Whether the NAA will collaborate with Centro is one thing. Whether NAA member publishers will collaborate with one another is different story. As the anonymous media buyer opined, newspaper publishers "are such lethal competitors. But that said, they may be forced to [work together]."

Reining in the Randomness

The McClatchy Company VP Interactive Media Chris Hendricks is not only on the NAA's Marketing Advisory Committee, he used the online newspaper network notion as his rallying cry at this year's Newspaper Association of America Mid-Year Media Review conference in June.

"We don't have a good, solid network for national advertisers to avail themselves of," asserted Hendricks while sitting on the conference's "Attracting Internet Ad Dollars: Solving the Value Equation" panel.

While speaking with ClickZ recently, Hendricks stressed the need for ad size, tag and analytics standards. An industry-wide network could certainly accommodate those needs.

Many small newspaper sites don't even offer ad sizes that comply with Interactive Advertising Bureau (IAB) standards. "Some, but not all of the local newspapers are conforming to [the IAB's] size program," affirmed Al Cupo, VP sales and marketing for Suburban Newspapers of America (SNA), a newspaper publishing trade group that launched its own network for national advertisers featuring about 150 sites representing 370 of the SNA's nearly 2,000 U.S. and Canadian newspapers. The SNA is not affiliated with the NAA, though some SNA members are also NAA members, according to Cupo.
While technical standards are a necessary component of simplifying the ad buying process, Cupo thinks standardization should not apply when it comes to ad rates. "I think that's what advertisers expect," he said.

It's important to maintain the individual quality of each specific site, and standardizing ad rates across a network could hamper that, contended Centro's Riegsecker. "We do not believe in standards of rates or ad units. It kills the originality and the flavor of all the local sites....What we do believe in is what we call rule sets," he commented. In other words, pricing should be based on the same criteria.

Developing a broad network surely will take time. No matter how it turns out, though, Riegsecker argued that newspaper sites should be playing up their strengths now. Things such as quality of messaging, quality of content, brand affinity and established local connections all distinguish online newspapers from the big ad networks and portals. Quality of messaging is most significant, he continued, noting that national advertisers have the ability to buy-out the homepage of a newspaper site when they'd be hard pressed to do the same on a portal.

"That," he said, "is something they can do that's unique to them."


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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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