QuadrantONE Expands Network Amid Parent Company Moves
Important Details: Just a month ago, QuadrantONE finally got its public go-ahead, as four newspaper companies unveiled their new national online ad network. Gannett and Tribune had long pursued the plan, talking to most companies in the industry. In its launch announcement, QuadrantONE added Hearst and the New York Times Company as equity participants. Now it has built out its inventory and its national reach, with the announcement that 138 additional websites – both newspaper- and broadcast-based – have agreed to provide additional “guaranteed” inventory to QuadrantONE.
The key highlight is the announcement that the 26-company (425 daily sites) Newspaper Consortium will begin to add its site inventory to QuadrantONE: with addition of the 138 consortium sites, the quadrantONE alliance will total more than 250 newspapers, representing more than 25% percent of all US daily newspapers.
The network’s expansion aims to fulfill a long-sought after industry goal: leveraging trusted newspaper brands and networking their online advertising inventory for national advertisers, all in the hope of boosting digital ad revenues and allowing companies to keep a greater percentage of their sales.
Serving as backdrops to the announcement were moves by two of QuadrantONE’s parent companies. The New York Times Co. acquiesced to the demands of Harbinger/Firebrand investors, who had bought close to a 20% share in the company. The investors have pushed the Times to increase the company’s value by shedding regional newspapers and the Boston Globe, investing and focusing more on the Times’ digital future. The investors had asked for four board seats and planned on contesting those at an upcoming election. Seeing the writing on the wall, the Times settled with Harbinger/Firebrand, awarding two newly added board seats and avoiding a proxy fight.
Meanwhile, the Tribune company announced a strategic review of assets, just two months after its going-private sale to entrepreneur Sam Zell finalized. Among those assets under review is Newsday, its New York City-based daily. Newsday has suffered the same circulation and ad losses as the rest of the industry. The daily may have strategic value in the market, though, to potential buyers. Those include owners of two competing dailies, the News Corp.-owned New York Post and the New York Daily News. Those tabloids have long fiercely competed, and a Newsday purchase could provide both greater marketplace reach and greater operational efficiencies. New York-based Cablevision is also in on the due diligence. Tribune has cited worsening revenues as the reason for its strategic review.
Implications: QuadrantONE is markedly stronger with its new expanded reach, but Outsell believes the original questions about the ad network persist. Will it have sufficient scale, even with its additional affiliates, and will it have state-of-the-art ad technology to provide the targeting and tracking ad buyers now demand? “Many-markets, one-bill” used to be the price of admission for ad networks, but now online ad buyers, facing a glut of choices, demand more.
A clear positive of this week’s announcement is that the newspaper consortium, first organized to do a deal with Yahoo!, is growing beyond that. It’s calling itself the Newspaper Consortium, and that portends a growing ability to consider market opportunities beyond Yahoo!, especially given the fact that Yahoo! is plainly in play. If the consortium can hold together and act as one, then it will find many ways to maximize the value of editorial content and of local ad sales relationships. Given the other week’s news — the Times’ board change and Tribune’s willingness to quickly shed a major asset — the need to find substantial new revenue streams is painfully obvious.