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AP BUYS NAA'S AD PLACEMENT SERVICE News cooperative will incorporate ad orders into AdSEND service.

The Newspaper Association of America's troubled Newspaper Industry Communications Center, a web-based display advertising placement service, was sold last week to the Associated Press, which will marry it into its existing AP AdSEND.

Terms of the deal weren't revealed.

Announced in 1998 (see NewsInc., Aug. 31, 1998), the Newspaper Association of America (NAA) of Vienna, Va., said that the Newspaper Industry Communications Center (NICC) was to be "a simple, fast, cheap way to communicate" between advertisers, ad agencies and newspapers.

Budgeted at $5 million that came from the NAA's financial reserves, the NICC was hobbled from the beginning:

* The earliest visions were excessively broad. They called for a nationwide clearinghouse of information about advertising in newspapers that would not only guide advertisers through building a newspaper campaign but would also go so far as to allow advertisers to track campaigns in individual papers. Over months of development, the focus narrowed considerably.

* It was developed by one consulting firm and then was to be carried out by another. While Booz-Allen and Hamilton helped the NAA develop the idea, for implementation the group turned to what is now known as KPMG Consulting. KPMG had built an on-line clearinghouse for the power industry, and it was believed this experience would benefit the NICC. As the vision kept changing, KPMG had to change the software continuously to match.

* Because of its affiliation with a trade group, the NICC wasn't allowed to negotiate ad rates between seller and buyer. And because of restrictions on trade groups, it wasn't allowed to endorse any one ad delivery method.

* In many ways, the NICC was competing not only with commercial third-party ad placement services, but also with services offered by state and regional press associations. The anticipated NICC service fee of one-half of one percent -- to be paid by newspapers -- was markedly different than the state press associations, some of whom charged up to five percent.

In an attempt to get some traction on the NICC concept, a year after its initial announcement the NAA purchased the Complete Newspaper Network of Sacramento (see NewsInc., Aug. 30, 1999). Finally, last January, the NICC unveiled eio -- the lowercase and italics were trademarked -- for "electronic insertion order." Though newspapers were participating, it seems that advertisers and agencies just never got on board.

While some may debate whether a news cooperative should even be in the advertising business, the AP's AdSEND service has been a success with both papers and advertisers. Using the satellite data communications network designed to distribute news and photos, AP AdSEND delivers ads directly into publishers' computers. More than 6.5 million ads have been transmitted since the service was founded in 1994.

By marrying the NICC to AdSEND, the AP will be able to offer a full palette of ad placement and delivery services to advertisers and agencies. Existing AdSEND customers will be leveraged into the NICC services, giving it the momentum and critical mass that it never achieved standing alone.

It appears that the traditional ad placement segment of the NICC -- the old Complete Newspaper Network in Sacramento -- remains healthy. The AP said the Sacramento employees would become AP employees. Also, when you think about it, the NICC is merely moving from one pocket to the other: The vast majority of the AP's owners -- more than 1500 daily newspapers -- are also the "owners" of the NAA. From a top-down industry perspective, the NICC should be with AdSEND.

There is no question, though, that while it would be excessive to call the NICC a failure, it did burn up a lot of energy and cash with little result. It appears the AP came to the rescue in the nick of time.

-- David M. Cole, e-mail:
COPYRIGHT 2001 The Cole Group
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Comment:AP BUYS NAA'S AD PLACEMENT SERVICE News cooperative will incorporate ad orders into AdSEND service.
Geographic Code:1USA
Date:Oct 22, 2001
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