SECRET NAA COMMITTEE TACKLES TROUBLED NICC

By: Joe Nicholson Group Seeks Partner For Web-Based Ad-Placement Project


The board of the Newspaper Association of America (NAA) has set up a secret committee to deal with the group's Web-based ad-placement service, E&P has learned.

The three-man committee, headed by former NAA Chairman William S. Morris III, is overseeing the search for a strategic partner that would take over operation of - and invest in - the NAA's problem-plagued NICC Web system, said NAA sources.

These NAA sources added that leading board members have insisted NICC be turned over to a buyer or operator that will run the system to benefit - rather than exploit - newspapers. Asked about this factor, NICC President and General Manager M. Blake Barker said, "I would certainly think that would be a benefit to both newspapers and advertisers." He said a partnership could take "a host" of different forms.

Whether the strategic partner takes over operation of NICC will be "strictly up to that partner," said Barker, who declined to say whether the partner is likely to be found before NAA's always-sensitive publishers conference in May.

In more than two dozen interviews with NAA and industry officials, knowledgeable sources said NICC's Web system has been hit with new problems. After its Jan. 8 launch, NICC transmitted a Wells Fargo ad. It has yet to transmit a second ad. Asked when a second ad will run, Barker said, "We're turning on the faucet on a slow basis ... just to let newspapers be aware of how to process the ads."

Barker said the Web operation - known as "eio," an acronym for "electronic insertion order" - has no "problems with the technology" and handled its one ad "very well." He added, "We have been looking at who we want to roll out, and we certainly have customers that are wanting to go on the eio at this time."

In the wake of the one-ad launch, NICC published a 49-line help-wanted ad in the March issue of the NAA's Presstime seeking a high-tech product development director to "push" the system to "the next level of technological sophistication and user acceptance." Subsequent to the appearance of the ad, four of 15 staffers at NICC's Vienna, Va., headquarters were laid off, including the office manager and a vice president hired only three months ago.

NICC has signed up 1,430 newspapers, but continues to seek three crucial links: The New York Times, the Chicago Tribune, and the Los Angeles Times.

The Web operation's launch had endured a year-long delay; NAA's investment in NICC was estimated by a newspaper industry executive with knowledge of NICC's finances as reaching as high as $15 million. One bright spot for NICC is its Sacramento, Calif.-based traditional ad-placement service, known as the Complete Newspaper Network (CNN) when NAA bought it several years ago from the California Newspaper Publishers Association; it has boosted annual business to $400 million, sources said.

Barker declined to speak about the layoffs, saying, "We wouldn't comment on any internal issues." He also declined comment on the revenue hike. Referring to the ad for a product development director, he said, "That individual has not been hired as of yet." He said NAA President and CEO John F. Sturm was leading efforts to find a partner. Sources said Sturm is working with Morris, chairman and CEO of Morris Communications Corp., and committee members J. Stewart Bryan III, chairman and CEO of Media General Inc., and Gary L. Watson, president of the Newspaper Division of Gannett Co. Inc. Barker declined to speak about the secret committee, saying, "I'm really not going to comment on anything that has to do with board-related issues."

A few prominent industry executives who would like an opportunity to buy or run NICC, or at least its Sacramento operation, said that they have not received offers. "We've talked with [NAA], but they haven't provided us with any information about the property," said Carleton W. Bryant, executive vice president of Seattle-based Mediapassage.

The Newspaper Network (TNN), NICC's Sacramento neighbor and a newspaper ad-placement service - like NICC - with about $400 million in annual billings, "would be willing to explore how [we] could help the NICC through its current situation," declared Alan Truax, president of TNN, which is owned by the McClatchy Co. Truax said he has not talked to NAA officials, but added, "I know they have talked to at least a few of our competitors in the last two or three weeks."

Alan M. Horton, a member of the NAA board's executive committee and senior vice president for newspapers at Cincinnati-based E.W. Scripps Co., said board executive committee members and NAA officers became convinced that "now is the time to hand [NICC] off in one way or another to someone who can take it to the next level ... whether it is a sale, a partnership, an alliance."

Horton is listed on NICC's Web site, http://www.nicc.net, as chair of its steering committee, but he said the committee has become inactive, he does not belong to the new secret committee, and he has been out of touch with NICC developments. But he declared that he remains convinced NICC has "a huge potential to benefit" newspapers by taking market share from other media.



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



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