AAN Classified Ad Network Studied

Program Would Be Complex, But Could Generate Valuable Revenue Stream.

Financially speaking, AAN has always lived dangerously, relying heavily on the donated ad program to pay the bills. Even though new sources of income have been added in the last few years, that single program still accounts for over 42% of the association’s FY 99 budget.

And to make matters worse, Sony Music has been the only reliable advertiser since the program’s inception more than ten years ago. If Sony were to bow out of the picture, AAN would be left scrambling for funds.

With that troubling prospect in mind, AAN recently created a new staff position to seek new advertisers and identify additional sources of income. In his first three months on the job, the individual hired to fill that position — former Washington City Paper account rep and Microsoft Sidewalk marketing manager Adam Ebbin — has spent considerable time researching the feasibility of an AAN classified advertising network, or as he calls it, an “AAN CAN.”

Ebbin presented his findings on Oct. 16 at the board of directors mid-year gathering in Memphis.

According to Ebbin, an AAN Classified Advertising Network — although “fairly complex to institute” — could provide a “valuable revenue stream within a fairly short time frame.”

Molded in the image of successful programs run by at least forty-two state press associations, AAN CAN would function much like the donated ad program. Member papers would supply classified space on a weekly basis and AAN would distribute the ads electronically. Like the donated ad program, classifieds could be sold by AAN staff or by classified personnel at member papers, who would receive a commission for each sale.

According to Ebbin, the newspaper associations he surveyed derive substantial revenue from their classified programs. For instance, the New York State Press Association brings in about $2.9 million annually, or more than four times the total revenue in AAN’s FY 99 budget. Perhaps a more useful comparison is the Suburban Newspaper Association (SNA) — like AAN, a national trade group — which stands to net over $150,000 from its classified program in 1998, just its second year of existence.

“There are lots of tough issues to deal with in building a classified network,” says Ebbin, “but I see no reason why AAN can’t put together a program at least as successful as the one created by SNA.”

Many of the state press association classified networks pay a rebate to their member papers; SNA has used its newfound funding to lower membership dues and convention registration rates for its member papers.

In his report to the board, Ebbin cited several types of potential national classified advertisers, including baseball fantasy camps, franchisers and debt refinancing firms. He also noted that it would be important to adopt stringent standards for the program to preclude fraudulent or other inappropriate classified ads. Another tough issue that was raised by several board members: The potential for displacing ads that are already being purchased.

After his presentation, the board asked Ebbin to continue his feasibility study, and to assemble an ad hoc committee of publishers and classified ad managers to provide feedback and oversight.

If you are interested in serving on the committee, please contact Adam Ebbin at adame@intr.net or 202/822-1955.

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