June 14, 2016

The Newspaper Association of America is closing its national ad sales firm — Newspaper National Network — at the end of the month.

According to an email memo Monday from chief financial officer Robert Walden to participating newspaper groups, NNN is on course to lose more than $1 million in the first half of 2016.

It will yield to Nucleus Marketing Solutions, a startup venture backed by Gannett, Tribune Publishing, Hearst and McClatchy.

NNN, started in the early 1990s, was a joint venture of NAA and 25 partner newspaper publishers. Nucleus Marketing is courting those as potential customers.

The significance is threefold for the financially pressed industry:

  • NNN was conceived in the print era as a convenience for advertisers to buy placements in multiple markets with a single order. Three years ago, Ray Chelstowski was brought on as CEO to sell print plus digital packages as he had done in previous postings at Newsweek/Daily Beast and Digital First Media.

    Nucleus reverses that balance. It will principally be a digital marketing solutions business offering the collective scale of local newspapers.

    Seth Rogin, former chief revenue officer of Mashable and before that a digital advertising executive at The New York Times, was named in April to lead and organize the company. In interviews, he has said the job is as much about digital innovation as selling ads.

    He told Ad Age:

    It’s not as much about geography as it is about reaching the right audience, and about reaching them in an environment of trust…. I don’t just want to be another ad sales guy. I want to support journalism that matters. This is really an opportunity to do that that’s unparalleled….This is not about just creating a network. This is about digital innovation, and I would not have changed my career if I did not believe really strongly in this.

  • National advertising, which remained reasonably strong while print classifieds cratered in the 2000s, has been a sore spot for regional newspapers for at least three years. Whole categories like pharmaceuticals have virtually disappeared. Department stores and other retailers have cut back their run-of-the-paper ads and frequency of pre-printed inserts as well.

    On the digital side, revenue growth has stalled as rates for generic placements continue to decline and big platform companies like Google and Facebook dominate.

  • A curiosity of Nucleus is that the two lead partners are Tribune Publishing and Gannett. The collaboration, an initiative of former Tribune Publishing CEO Jack Griffin, was put together before Gannett launched its hostile takeover bid, which Tribune has fiercely resisted.

    Besides that odd pairing, there would appear to be potential overlap between Nucleus and Tribune chairman Michael Ferro’s vaguely defined ambitions for an artificial-intelligence-driven “content monetization machine” he calls tronc (soon also to be the corporate name for Tribune).

Tony Hunter, chairman this year of NAA, was formerly publisher of the Chicago Tribune. With Ferro’s arrival, he changed jobs to directing national advertising efforts for all 11 Tribune papers.

David Chavern, NAA president and CEO, declined to comment, and a call to Rogin was not immediately returned.

Even in the absence of a lot of detail, the handoff is one more marker of the industry’s ongoing search for more digital business traction — and willingness to go to the digital-only sector for expertise in bringing off that transition.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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