Atop NAA's agenda are several initiatives designed to garner more national advertising, which media buyers and publishers call make-or-break motions for newspapers. So when Newhouse met last month with industry executives in Seattle and San Francisco, his rallying cry was simple: "I need help."
Newhouse would not say that about Advance Publications, the privately held company he controls with his far less obscure brother. While the high-profile Si runs the Conde Nast side of the $4.5-billion business, Don quietly oversees the company's 26 dailies and personally keeps tabs on the four larges--the Newark Star-Ledger, New Orleans Times-Picayune, Portland Oregonian and Cleveland Plain Dealer. Media analysts believe that what these papers lack in editorial glamor, they make up for in profits. Some even speculate that the humdrum newspapers help bankroll the glossy magazines.
Although Newhouse lives in New York, he works out of a large, modestly furnished office at the Star-Ledger. His turn as NAA chairman comes at a time when the industry is reeling from three years of recession and is increasingly hearing talk of an electronic-information future without ink on newsprint. "I think it's a very important year," Newhouse says with characteristic understatement. Then again, he adds, "I have never lived through any time in my career when there haven't been grave challenges facing newspapers."
Newhouse says that NAA, now in its second full year of existence, has worked out most of its merger kinks. He expects significant progress on longstanding industry problems during his one-year tenure, especially on removing barriers that make it difficult or inefficient for multimarket national advertisers to buy newspapers. In June, NAA circulated a standard advertising invoice, which Newhouse hopes all newspapers will adopt by September 1994. And the one-order/ one-bill system, which will allow an ad to be placed in multiple newspapers with one phone call, should finally be operational by the end of this year.
"We have to overcome misperceptions," Newhouse says, "and we have to do certain things to signal to an advertiser that we are sincere in making it easier to buy newspapers." Beyond these "infrastructure" enhancements, a national sales group within NAA will be established this year to go after categories (toiletries and cosmetics, automotive brand-building) and advertisers (Home Depot, Dillard's, Toys "R" Us) that rarely use newspapers.
Newhouse will not comment on how rate discounts will be used to help cement this sales effort or on whether there will be an effort to redress the rate differential between national and retail advertising. But Jack Cohen, vp/director of print and outdoor media buying at DDB Needham, expects newspapers to charge less for traditional non-users. If that yields additional advertising volume, he adds, the industry will be more inclined to adjust rates lower for everybody. "Publishers have reached the point where they have to move or national advertising will go down the tubes," Cohen says. "Newhouse appears to have the ear of publishers for reduced rates and appears to have the ability to bring them together."
But at least one newspaper exec, who heard Newhouse's recent West Coast pitch and ardently backs the effort to make newspaper buying easier for agencies, balks at the price breaks. "Giving discounts to those who don't use you is a slap in the face to your regular customers," says Robert Oristaglio, vp/marketing for Alameda Newspapers in California.
Will Newhouse's "I need help" plea be enough to get publishers working in concert toward industrywide goals, something that has hindered past efforts at change? Those who compete against him believe so. "He is a newspaperperson, and that obsession is important for someone at the top of NAA," says Don Lass, editor and publisher of the Asbury Park Press, New Jersey's second-largest paper after the Star-Ledger.
Though taciturn by nature, Newhouse has preserved and strengthened the newspaper empire built by his father. It's hard to argue with his success--not to mention his billionaire status. But his task with NAA is about more than preserving the family business for the next generation. That he's asking for assistance shows just how daunting the challenges are. "The industry's interest is his self-interest, more than ever before," says Matti Prima, a newspaper analyst. "He wants to make sure people see that newspapers are not going the way of dinosaurs."
Stephen Bart is a freelance writer based in New Jersey.
Copyright Adweek L.P. (1993)