Associated Press moves into digital ad business

The Associated Press is getting into the ad business. At a media event in New York on Thursday, the non-profit news organization presented ad agencies, members of the media and technology professionals with its new approach to selling ads across various multimedia platforms.

This is a first for the news association, which has historically sold and distributed its content to newspapers and news agencies. But the Association is challenged with the changes that digital media have brought about in media consumption patterns.

“Digital content has been disrupted by the fragmented distribution of content,” said Jim Kennedy, VP of strategic planning at the AP, in a panel at the event. “Our job has changed. Before, we had to think about packaging our product for consumers, but now we have to think about consumers and how the content is being consumed.”

And this new approach is not black and white. The AP is experimenting with new forms of digital media and an ad supported model in hopes of being innovative. “Innovation is a process; it is a culture that you build inside your brand,” Kennedy noted.

So, just as portals including Yahoo, AOL and Google have gotten into the content business, the AP is getting into the ad business. This new offering in impression sales and branded content is a response to the challenges that newspapers are facing. In fact, in these hard times for publishers, the value of breaking news has gone down, and the AP announced in April that they would lower the licensing fees for their content by $35 million in 2010.

“The newspaper industry is going through a change and now everyone wants access to information for less,” said Jeff Litvack, general manager, mobile and emerging products at the AP. “And we will continue to deliver information in a way that is affordable.”

The new content available for media buys includes branded multimedia content such as slideshows for events like the Olympics or the Oscars. The branded content can travel across a publisher’s network to various sites, while keeping the same advertisements, even as the consumer navigates to other content. There is also an online video network built in conjunction with Microsoft.

The various media includes the ability to micro-target and geo-target local ads, as well as serve up ads on a contextual basis. Rather than working with an ad network, as they have in the past, the AP has also built out its own ad network. The brand reaches 125 million consumers. In addition, the AP has begun to hire ad sales staff to increase service in this area.

“This shift for us is logical, because we have the content and we have the reach,” added Litvack.

The new AP ad suite also includes a significant mobile push. The AP announced Thursday the availability of its upgraded iPhone App for version 3.0, with a push notification. The AP Mobile news application, which was built by Verve Wireless, has been a popular iPhone App, being named in the top 10 iPhone Apps by Time magazine. The App offer is that it hosts content from across the AP’s consortium of 1,500 newspapers. In the last year, the App saw a 70% growth in news consumption.

“Building a mobile app is expensive for each individual newspaper to invest in, so we decided to do it as an industry and partner with the newspapers in our group,” said Litvack.

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