Magazine article Editor & Publisher

Newspapers Now at the Gate in Race for a Piece of the Action

Magazine article Editor & Publisher

Newspapers Now at the Gate in Race for a Piece of the Action

Article excerpt

New division for midsize papers sired by newspapers first

Newspapers First, whose stable of big-paper thoroughbreds excludes undersized ponies, is creating a midsize division, E&P has learned.

The expansion runs counter to years of mergers and contraction among newspaper rep firms.

Newspapers First, a New York-based co-op owned by its 40 member papers, isn't becoming more egalitarian entirely of its own volition. Rather, several of the co-op's corporate owners came pounding on the firm's door, demanding representation be provided to their midsize papers as well as their metro dailies in the elite 40.

"The key point is that the corporate groups wanted it. They came to us and asked us," explained Newspapers First President and CEO Jay Zitz.

The co-op feared tempering its exclusivity would mean losing cachet. Madison Avenue, mythological and sometimes actual home of ad gurus -- and three blocks west of Zitz's Third Avenue headquarters -- has rolled out the red carpet for the big horses of the newspaper industry because agencies need them to put together a national newspaper campaign.

"We have a very high level of clout," Zitz told E&P. "We were concerned that if we added the midsize papers, that would diminish the clout level in those sales calls."

Zitz's member owners, including chains such as Gannett Co. Inc. and Knight Ridder, sit on his board, and a way was found to mollify them without, Zitz hopes, sapping his big-paper horsepower. A new division was created with an entirely separate sales and research staff; so far, nine sales reps and sales assistants have been hired. Sales reps from one division will not accept purchases for the other division's papers, although Zitz said they will share information about prospects "to the extent that it is appropriate to do so."

To head the new division, Zitz hired Wayne E. Kuhn, a veteran ad executive from the nation's biggest rep firm, New York-based Landon Media Group Inc., which represents 950 newspapers, nearly two-thirds of the nation's dailies.

The new division, dubbed Newspapers Now, has signed up 23 charter members. Its business plan calls for it to reach 40 to 50 by the beginning of next year. The plan anticipates a full-size division with 20 to 25 sales reps and sales assistants and a roster of 50 to 75 papers. (Newspapers First has 57 sales reps and sales assistants.)

Both divisions receive their reimbursement from fees paid by member papers. The fees are based on a number of factors, including the publication size and, particularly, national ad revenue volume. As Newspapers Now accumulates more members, executives plan to invest additional fees in its sales and marketing efforts.

Papers are being wooed for the new midsize division with the same pitch that works for the big-paper division: the co-op maintains what it contends is an unmatched marketing and research department. The co-op's 10 staff researchers generate original material, and they work with outside research organizations that the firm retains.

Superior research has pinpointed the location of the biggest ad revenue lodes, especially in automobiles, telecommunications, financial institutions, hotels, airlines, and travel, according to Newspapers First executives, so sales reps don't waste time pitching prospects with shallow pockets. Some pitches are made directly to advertisers, but a majority, somewhere between two-thirds and three-fourths, are made to their ad agencies. …

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