A group of large newspaper organizations - Gannett Co. (NYSE:GCI), New York Times (NYSE:NYT), Tribune Co. and Hearst Corp. - have put together an online partnership for the purpose of selling ads across local news Web sites.
Dubbed quadrantONE, the four companies will jointly own it, and will offer advertisers approximately 50 million unique visitors a month across its partner sites. Newspapers considered national and international like The New York Times and USA Today won't be part of the advertising effort; only local newspapers are part of the venture.
The benefit being touted by the new intitiative will be the ability of advertisers to buy advertising on over 170 broadcast and newspaper sites without the need to negotiate every deal individually.
"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 today in an interview. "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."
Display advertising will be the focus of this new effort, as quadrantONE won't attempt to compete in the already saturated search and online classifieds market. A smart move, as it would be a waste of time and money to attempt it.
Temporary quardrant CEO Dana Hayes says the new partnership will be "very complimentary" to the existing Yahoo (Nasdaq:YHOO) partnership, where Yahoo provides the search for newspaper Web sites, and sells ads at the national level. In return, the publishers sell local ads on Yahoo Web pages.
It may compliment The New York Times and Hearst, but Gannett and Tribune aren't part of the Yahoo deal.
A major impetus behind this is for the newspapers to control their own destiny; something that is becoming increasingly hard to do for them.
The newspapers also claim to know the local markets better than tech companies like Yahoo, Google (GOOG) and Microsoft (MSFT), although that has yet to be proved.
This will give them a bigger piece of the advertising pie, as far as portions of the spend goes, but they're betting the farm on knowing more than the tech companies in their online specialties.
The big three online companies have been targeting the large, mainstream newspaper news sites in an effort to grow their advertising revenue as well. This is the response to that targeting, and the newspapers hope it will be an answer and advertisers will join because of the scale and one-stop shopping they offer.
Each newspaper involved will offer standard onlne advertising units to a pool, which will then be sold to advertisers.
Advertising will also be able to be sold by region or specific news categories, such as lifestyle, sports and business.
Comment Preview