NAA WEB-BASED AD INITIATIVE SEEKS PARTNER

By: Joe Nicholson 'Considerable Concern' About NICC


Less than two months after the launch of the Web-based ad-placement service of
the Newspaper Association of America (NAA), the trade group is looking for
outside help, E&P has learned.

NAA's board "authorized us to pursue partnerships or business relationships with
outside organizations," said NAA President and CEO John F. Sturm, who reported
that discussions with potential partners have been going on for several months.
Asked whether outside help might reduce or eliminate the need for NAA to
continue spending millions on the project, Sturm said, "We're beyond what I want
to comment on at this point."

Last week, E&P reported that NAA Chairman Andrew Barnes responded to a
question about cutting off funding by saying, "I'm happy to say [that] is not
the question right at the moment." But Barnes, also chairman and CEO of the
St. Petersburg (Fla.) Times, said there was "considerable concern
and discussion" about the ad-placement service's technology and usage.

NICC, as the NAA's for-profit ad-placement service is known, was conceived as a
project to make newspapers more attractive to advertisers, who have long dreaded
the excruciating difficulty of making multi-newspaper buys. Although NAA has
invested millions, and the project has endured delays, Barnes said he remains a
strong NICC advocate because it helps him to improve his "bottom line." Barnes
conceded, however, that NICC faces hurdles: "It's not obvious just what is the
right way to get from the point where we are to the final point."

By early February, NICC had signed up 1,321 daily and weekly newspapers, said
Sturm. NICC's best-known competitor is Seattle-based OneMediaPassage.

Barnes and Sturm declined comment on estimates that as much as $15 million has
been invested in NICC, which has a staff of about 15 at its Vienna, Va.,
headquarters and about 60 at its office in Sacramento, Calif. Sturm said the
investment amount has not been made public and added, "I don't think if you were
asking Microsoft [that] they would tell you how much they invested in Windows."

Sturm said potential partners would not necessarily become owners or partial
owners: "It could be a contractual relationship. It could be a vendor
relationship. It could be a partnership with an advertising organization. It
could be a whole bunch of things, but I'm not going to limit it, because that
would not be fair to your readers."

M. Blake Barker, NICC's president and general manager, said, "We are looking for
strategic partners to expand the business and get it moving even that much more
quickly." NICC's Web-based service was launched Jan. 8.

Sturm last week declared, "What I can tell you is that the system works." He
said ads already were being placed through the system, but he added: "The system
is not yet at the point where it is going to be someday in the future. In other
words, the system will always be enhanced as we move forward.

"We would have liked to have launched the electronic systems some months ago,"
he said. "There is no secret about that. We were delayed in our development, and
that's made life a little bit more difficult than we had hoped it would be. But
we're taking, shall we say, small steps with the electronic system, and it's
performing just fine."

Last May, NICC officials said they had a $12-million line of bank credit, which
was intended to pay off NICC's initial $5-million investment and provide for
continuing development of its Web ad-placement service, known as eio (an acronym
for "electronic insertion order"), as well as ongoing operation of traditional
pre-Web ad-placement operations.



Joe Nicholson (jnicholson@editorandpublisher.com) is an associate editor covering marketing and advertising for E&P.



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