NAA to create ad services arm p.17

By: Rob Lenihan New York-based unit will charge newspapers
commission for services
The Newspaper Association of America is investing $5 million to create a subsidiary geared to making life easier for everybody involved in newspaper advertising.
NAA president and CEO John F. Sturm said the Newspaper Industry Communications Center will use digital technology to streamline the flow of information among newspapers, advertisers, agencies and other organizations involved in newspaper ad transactions.
"The goal is to eliminate some of the difficulties that advertisers encounter when placing multimarket ads," Sturm said. "It will be done by electronically linking all participants in the ad buying and placing process."
Plans call for the new unit to use Internet technology, electronic commerce, and centralized databases to connect advertisers and newspapers.
Sturm said the idea for NICC developed from the association's experience with its National Newspaper Network subsidiary, a newspaper ad sales organization located in New York.
NICC will neither replace existing service providers nor negotiate rates.
"We know from our members that sometimes the process is cumbersome," he said. "We had the advantage over the last three to four years of experiencing the process firsthand. NNN was intimately involved in the process. That certainly demonstrated to us the need to make the process more efficient, less costly and better for everyone."
One of NICC's goals will be to hook up advertisers with important demographic, circulation and readership data. NICC will take about a year to get off the ground and have a staff of about 10-12 people.
Steve Maietta, chairman of the American Association of Advertising Agencies' newspaper committee, welcomed the concept of the new unit.
"On the drawing board, it sounds terrific," said Maietta, senior vice president and associate media director at Bates USA. "Until we see what it can actually do with some hands-on experience, it's hard to judge."
Maietta said there is a definite need for what NICC hopes to do because ad agencies wait six weeks on average before they can confirm whether an ad ran correctly in all the papers it was scheduled for.
Maietta, noting that some newspaper ad rep firms are also developing online services, said, "There may be a little competition. It could be an interesting couple of years for the newspaper business."
The firm of Booz-Allen and Hamilton began the concept development for NICC, and KPMG-Peat Marwick will be the primary developer to implement it.
"Our consultants have talked to a lot of advertising folks," Sturm said. "Generally speaking, advertisers have been very excited about this, since the primary aim is to make their job easier and cheaper."
Newspapers will initially pay 0.5% of the ad revenue received via NICC for the organization's service. Advertisers, ad agencies and other third-party vendors will receive free assistance from NICC employees.
"We're going to have a big marketing job once the system is built," Sturm said. "That will take some time, and we recognize that. We think the system is going to be so attractive that eventually people won't want to live without it."
?(John Strumm) [photo]
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?(copyright: Editor & Publisher September 19, 1998) [Caption]