From ClickZ. Full story here

Yahoo's partnerships with newspaper publishers - including one of its biggest scores, Gannett - are chugging along. The company continues to consider new ways of working with its so-called consortium of local media partners. For instance, as Gannett begins testing Yahoo's ad management system, Yahoo is exploring expansion of the relationships into the daily deals space.

"We continue to talk with the leaders of the consortium about lots of opportunities, and the deals space is certainly one," said Lem Lloyd, VP of Yahoo's Newspaper Consortium, during a talk with ClickZ News late last month. "I wouldn't be surprised if you see something along those lines later this year."

Yahoo already partners with daily deals providers like Groupon, LivingSocial, and Gilt City for its "Local Offers" channel.

"To the extent that opening up more traffic and distribution can enable [newpaper partners] to accelerate growth in the daily deals category, Yahoo is an attractive partner for them," said Lloyd.

Gannett Digital owns properties in the local retail arena such as shopping circular provider ShopLocal and CouponClipper.com. It told ClickZ in December it has tested its own social commerce programs pairing local advertisers with consumers seeking nearby deals.

But Yahoo's newspaper partnerships are entrenched in display advertising. Yahoo gradually has been integrating partners like Gannett onto its APT ad management platform, the roll out of which has sputtered since its unveiling in 2008. For instance, while Gannett initially planned to begin testing APT late last year, the company only just began in the last few weeks, according to Jack Williams, president of Gannett Digital Ventures.

The hold up was due to a series of upgrades Yahoo made to the system - some that would have affected the integration with Gannett. The publisher decided to wait to begin training employees on APT until the upgrades were complete. "Otherwise ...we would be duplicating the work," said Williams.

Despite the hiccup, one Gannett paper site has been converted and another is in the works. In all, the firm will test "several" paper sites and one TV site in about four markets, Williams said. For now, Gannett is using the platform to manage the Yahoo inventory it sells to broaden the reach of its audiences for local advertisers.

Companies like Gannett use the platform to view available inventory by advertiser segment in their DMAs - for instance, luxury SUV buyers in Phoenix. From there, they can create ad packages for clients. Gannett is assessing various aspects of the platform, including inventory management, ease of use for ad input, and ad trafficking.

When Yahoo finally signed Gannett as a partner in July 2010, it was a significant win for the company. Yahoo had already aligned with around 40 newspaper publishers as part of its newspaper consortium, representing around 800 paper sites. Today, Yahoo counts its newspaper partner sites at closer to 900 (the Gannett deal brought in over 80 sites, adding new local markets for Yahoo), and has incorporated broadcast television sites from partners including Media General, Freedom Communications and Gannett. Although the Gannett deal is very similar to that of Yahoo's other newspaper partners, technically Gannett is not a part of Yahoo's Newspaper Consortium.

"Probably 80 to 90 percent of our markets are well ahead of the [projected] numbers," said Williams.

During Gannett's Q4 2010 earnings call last month, the company reported, "the partnership is working as planned," and said 39 sites - just about half - are selling Yahoo inventory, and "several" others plan to complete the setup process by the end of March. In addition, Gannett said all of its seven targeted broadcasting markets have launched the Yahoo program, culminating recently with Arizona's KPNX and its azcentral.com site.

That setup process involves training local Gannett sales staff on how to sell Yahoo inventory. "We train them on Yahoo behavioral targeting and Internet advertising, and trends that we're seeing," said Lloyd.

Though the broadcast sites Yahoo works with have lots of video content, the company is only serving display ads around that content at the moment, rather than in-stream advertising. For Gannett, that could change down the road, according to Williams. "I don't know why we wouldn't consider that if it's feasible," he said.

Also in the future, Gannett could consider using the APT platform to serve its own inventory. "That's a longer term process," said Lloyd, "That's really more up to them."

As we have written about before in this blog, Yahoo's deal with newspapers giving them the right to sell digital display ads on Yahoo to newspaper customers, has always seemed like a much better deal for Yahoo than it was for the newspapers but it just got much worse. 

PaidContent has this story today on Yahoo's new partnership with AT&T, which gives presumably yellow page salespeople the same selling privileges as newspaper salespeople. Therefore, any attempt by newspapers to use the Yahoo network as an added value to a print buy has just become very difficult to do. If I were involved with a newspaper association or trade group and I had a pulse, I would be looking around for a new partner.

Here is part of the story from PaidContent:

AT&T’s 5,000-strong sales force will begin to sell Yahoo’s display inventory in local ad markets starting later this summer, under a new partnership the two companies announced Tuesday. During Yahoo’s earnings call, CEO Carol Bartz boasted that the relationship means that Yahoo (NSDQ: YHOO) will now have 13,000 local ad sales reps located across the United States. But the partnership could create new competition for many of Yahoo’s existing reps who work for members of the Yahoo Newspaper Consortium, since there is likely to be overlap between the local businesses the two groups will sell to. In an interview with ClickZ, Yahoo SVP Jim Schinella dismisses those concerns saying that newspaper and directory companies have long competed in the same markets and they “naturally gravitate toward different business partners.”

Informative story in Forbes this week on the Yahoo newspaper consortium. Points out some issues we have addressed in this blog before - is this really the best deal newspapers can get? Excerpt below. Full story here.

In exchange for access to Yahoo!'s ad inventory, papers turn over half of the revenue from ads they sell on the portal. Since joining the consortium, the Atlanta Journal-Constitution expanded its local reach, the proportion of the regional population who hit its Web site in a month, from 15% to 85%, Yahoo! says. The Evansville Courier Press, an Indiana daily with a circulation of 60,000, sold $1.1 million in Yahoo! ads in a week-long "sales blitz." Yahoo! won't discuss the specifics of the revenue-sharing agreement, but newspaper partners confirmed the 50-50 arrangement.

But the partnership could have an even bigger cost for newspapers. In the offline world, newspapers have traditionally dominated advertising sales to local businesses like retailers, car dealerships and supermarkets. By introducing their local advertisers to Yahoo!, newspapers run the risk of turning over their best customers to a digital powerhouse as they try to rebuild their own businesses online.

At Mediabids, we are in a similar business. Granted, there are structural differences between selling display ads like Mediabids does and selling online advertising but splitting the revenue 50-50 seems like a very high price to pay for the right to sell on behalf of Yahoo. Newspapers have an unparralled salesforce- no one else does as comprehensive a job reaching local merchants. They should get more.

And has the increased reach among local markets helped inflate the rates publications can get on their own for ads on their websites? Or has the increased inventory diluted the value of the product and decreased the overall prices?

Side note: it would be extremely interesting to see what the rate of renewal among advertisers who buy into Yahoo via newspapers will be. My prediction - it won't be good.