By: The Associated Press and E&P Staff
Three major newspaper publishers, Gannett Co., McClatchy Co. and Tribune Co., are said to be considering a plan to allow clients to buy Web site advertising for all three companies in one deal, according to an article in The Wall Street Journal.
In recent years, newspaper publishers increasingly have lost advertising and subscription dollars to the Internet, sparking downsizing efforts and greater pressure from investors.
While the three competitors have not finalized plans, the effort aims to attract big, national advertisers like car companies for Internet display ads, the Journal said. Through the joint effort, advertisers only will need to negotiate one deal instead of going to each company or newspaper.
Shares of Gannett, publisher of USA Today, closed at $59.63 Tuesday on the New York Stock Exchange. McClatchy, which publishes the Sacramento Bee and recently bought Knight Ridder, closed at $41.08. Tribune, publisher of the Chicago Tribune, closed at $30.75 on the NYSE.
A Reuters report follows.
The companies plan to offer advertisers one-stop shopping for display ads on Internet sites, a spokeswoman for Gannett said on Wednesday.
The companies are likely to contribute 10 percent of their online advertising space to the network, The Wall Street Journal reported on Wednesday, citing people familiar with the situation.
They hope to make an announcement early this year, but the deal could still fall apart, the Journal said, citing the same sources.
McClatchy and Tribune officials were not immediately available for comment. Gannett’s spokeswoman declined to provide further comment on the details in the Journal story.
Gannett Chief Executive Craig Dubow outlined the plan at a media conference in December, but did not provide details.
“The goal is to create the largest network of newspaper- developed local sites for any advertiser to reach local consumers,” Dubow said at the conference, according to a transcript on Gannett’s Web site.
“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.”
The goal is to attract big advertisers like automakers and phone companies that want to reach an online audience without negotiating ad deals with individual companies or newspapers, the Journal said.
The plan comes as large U.S. newspaper publishers bulk up on online dollars as circulation at most papers slips and advertisers move away from print and onto the Internet.
Print editions still account for most of the U.S. newspaper company publishing revenue, with online accounting for 5 to 10 percent on average. That amount is rising quickly, however.
The share prices of several publishers have also underperformed the wider market as print growth slows.
Tribune is in the midst of a corporate review that could lead to the company’s breakup.
McClatchy sold its largest paper, the Star Tribune in Minneapolis, Minn., to a private-equity firm for about half the price it bought the paper in 1998.
Gannett, meanwhile, is retooling newsrooms at its nearly 90 local daily papers to focus more on the 24-hour delivery of news on the Internet.
The companies’ newspapers include some of the largest in the United States, including USA Today, the Los Angeles Times and the Miami Herald.