The relationship adds 81 Gannett paper sites to Yahoo's local arsenal, the majority of them serving markets the rest of Yahoo's newspaper consortium do not.
Years after several of its newspaper competitors joined Yahoo, Gannett has finally decided to take the plunge. Like many other paper publishers partnering with Yahoo, the deal entails Gannett selling Yahoo inventory to its local ad clients, essentially broadening the audience reach it can offer them. The relationship adds 81 Gannett paper sites to Yahoo's local inventory arsenal, the majority of them serving markets the rest of Yahoo's newspaper consortium do not.
"They bring lots of new markets to us," said Lem Lloyd, VP of Yahoo's Newspaper Consortium. Lloyd listed larger markets including Phoenix, Indianapolis, and Wilmington, in addition to smaller ones like Burlington, Vermont and Tallahassee as examples of "virgin" markets for Yahoo in which Gannett owns publications. "It matches very well with the partnerships that we have," he said.
"We've been talking to them for a long, long time," said Lloyd of Gannett. He said the companies waited to ensure their "interests are aligned" and executives with both firms supported the partnership.
"Gannett has taken much more of a go alone attitude," said Ken Doctor, a news industry analyst who has followed the evolution of Yahoo's newspaper deals and the digital evolution of the newspaper business closely. Now, continued Doctor, Gannett is "falling back more into their peers' conventional wisdom at the moment... They're less different than they thought they were."
Yahoo's other paper partners have seen promising revenue growth as a result of the Yahoo deal, which certainly may have been a deciding factor for Gannett.
"When the consortium started, Yahoo had not built the ad platform for the anticipated sales relationship, or established the actual practices for that," Robin Pence, VP corporate communications at Gannett, told ClickZ News in an e-mail. "Others were willing to sign on then because they wanted the Hot Jobs relationship Yahoo offered. With our CareerBuilder investment, we did not need Hot Jobs and felt we were better served waiting until the technology was built and proven, and the sales operation developed and proven."
Gannett will also use Yahoo targeted inventory to broaden reach for seven of its broadcasting division websites. A recent expansion of Yahoo's deal with Media General to include its broadcast sites, along with a similar deal with Freedom Communications and another unnamed broadcast partner, may have influenced Gannett's decision to join Yahoo, Lloyd said.
Although the Gannett deal is very similar to that of Yahoo's other newspaper partners, Yahoo said that technically Gannett is not a part of Yahoo's Newspaper Consortium.
As part of the deal, Gannett will join the 200 or so newspapers that have recently transitioned to Yahoo's APT ad management platform for local ad sales. Now that so many of its paper partners are on the Yahoo platform, Lloyd expects another component of the partnerships to ramp up: Yahoo selling its partners' local inventory to national advertisers.
"We haven't focused on that," said Lloyd. "They weren't all on the platform so it didn't really make sense... I think you'll see more of that, but it also has to be the right kind of ad campaign."
If that does happen, it could potentially cut into the business of QuadrantOne, an ad network selling premium local inventory from Gannett, Hearst, Tribune, Media News Group (also Yahoo partners), and several other newspaper site publishers, to national advertisers. At this stage of the game, insiders and observers say QuadrantOne is not threatened by the Yahoo/Gannett deal or the increasing distribution of Yahoo's APT platform.
"Gannett will be testing the Yahoo APT system in its pilot markets later this fall and then make a determination on the extent of use," said Pence.
If anything, the partnership with a longtime holdout and one of the largest U.S. newspaper publishers signals Yahoo's deepening connection with these local media firms. According to Lloyd, Yahoo's paper partners have sold 42,000 campaigns on Yahoo. Ultimately, Yahoo's goal is to broaden the distribution of its APT platform in the hopes of dominating online display advertising.
"You can't underestimate the importance of being on the same ad platform," said Lloyd.
"Everyone has their own strategy on how to go to market, what technology is needed and thus what platform to chose," said Pence. "While there may be advantages to the industry if everyone was on the same platform, those advantages could easily be outweighed by disadvantages for some of the industry."
According to Doctor, the relationships the newspaper sites have with Yahoo and QuadrantOne serve the same goal - mainly to keep the paper publishers "out of low-priced ad networks and maintain some price integrity... They're different sides of the same coin."
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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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