Mediapassage Goes Out Of Business

By: Lucia Moses Mediapassage, one of the first to offer Internet-based print media ad placement and delivery services, ceased operations on Monday.

The company said on its Web site that it cannot fulfill requests made after Sept. 21 for ad placements. All the company's roughly 150 employees, mostly based in Seattle, were laid off when the company closed its doors.

With its Web-based services, the 4-year-old Seattle-based company sought to address the inefficiencies, errors, and redundancies in the ad transaction process that cost time and money.

Carl Bryant, Mediapassage's founder and executive vice president of strategic and business development, said the company had booked $40 million in newspaper advertising in September and expected to become profitable as early as the fourth quarter of 2001.

However, the emergence of the Newspaper Association of America's Web ad-placement service NICC, albeit facing its own financial troubles, and the downturn in ad spending, however, led to difficulty in attracting new investment, Bryant said.

"With the NAA propping up a new competitor and with the sudden downturn in the media economy, it stretched out the profitability goal," Bryant said. Referring to talks between the NAA and The Associated Press to sell the NICC to the AP, he said, "An investor's going to say, 'I'm not going to compete with the AP.'"

Gilbert Scherer, Mediapassage's ex-chairman and CEO, said the lack of industry standards surrounding Web-based ad placement, which led to confusion and disagreements between buyers and sellers, also contributed to the company's woes. Ad agencies felt the media should pay for the service, even though the agencies themselves enjoyed much of its cost-saving benefits, Scherer said.

Scherer left the company in early September. He said his departure was voluntary and stemmed from a "different view [from the board] over the future of the company."

The coup de grace was the Sept. 11 attacks on the United States, which struck a blow to the travel industry. Travel was Mediapassage's third largest category, Bryant said.

Bryant said despite the demise of Mediapassage, he still believes that ad placement is headed toward an electronic process. "It's not if, it's when," he said.