NAA seeks government OK on national sales force p. 23

By: George Garneau NAA seeks government OK on national sales force p. 23

THE NEWSPAPER ASSOCIATION of America has asked the Department of Justice to approve its plan for pricing and selling national advertising in newspapers throughout the country.
NAA, a non-profit association of 1,400 newspapers, filed its plans in August and expects a response in November, chief operating officer Len Forman said.
The group is seeking approval in advance because of the antitrust implications inherent in setting up a sales organization that is taking a roll in pricing.
Forman said the large document that NAA submitted proposes a "mechanism" for setting rates that is consistent with antitrust laws, which generally forbid competitors to join together to set rates and divide up markets.
"Basically, the marketplace is going to dictate what the rates are going to be," he said, refusing to disclose details.
With government approval, NAA plans to set up by early next year a vehicle through which national advertisers can order and pay for ads in newspapers throughout the country.
That would be a major accomplishment.
Now, advertisers are forced to order and pay for ads one newspaper at a time ? and pay sharply higher prices than local advertisers.
"We need a mechanism to assure competitive rates," Forman said.
While other newspaper networks use existing rates, based on ad size and circulation, NAA is expected to move to rates based on cost per 1,000 circulation, as Newspapers First has offered.
Participating newspapers have to agree on standard national rates, and the rates have to be competitive with other media.
NAA must figure out how to set rates that are agreeable to newspapers and advertisers ? without illegally fixing prices.