Summary:

With newspapers having suffered through 20 straight quarters of decline — and no end in sight — a collaborative effort on the part of the…

AP's iCircular

With newspapers having suffered through 20 straight quarters of decline — and no end in sight — a collaborative effort on the part of the Associated Press and 40 newspapers is designed to play on two of the industry’s last advertising strengths: digital and pre-print circulars.

The new mobile initiative, dubbed “iCircular,” will start rolling out on Monday within the mobile sites and apps of the 40 newspapers.

The iCircular feature will be found within newspaper mobile apps on the iPhone. The feature will be available on other formats, such as Google’s Android, later on. It’s HTM5-based, so that will also be available on newspapers’ web and mobile wap sites and ultimately ease iCircular’s transfer to other operating systems. The app will be situated within a special “Deals” section on each of the newspapers’ apps and mobile sites.

“It’s essentially an app within an app,” said Mary Junck, chairman of AP’s board of directors’ revenue committee and CEO of Lee Enterprises (NYSE: LEE). “We didn’t want to create an app separate from the newspapers. We wanted something that would be as integrated into the newspapers as a Sunday circular is in the print editions.”

Interestingly, the program is open to all newspapers, not just AP members, Junck told paidContent in an interview. “This is meant to address a problem and promote an opportunity for all newspapers,” she added.

Launch partners include the New York Daily News, The Philadelphia Inquirer, the New York Times (NYSE: NYT) Company’s Boston Globe, Hearst’s San Francisco Chronicle, Cox Media’s Atlanta Journal-Constitution, AH Belo’s The Dallas Morning NewsTribune Company’s Los Angeles Times and Chicago Tribune, and other representatives of nearly every major newspaper company. (The whole list of iCircular newspaper launch partners.)

The idea offers newspapers a chance to make sure they don’t lose the last important revenue stream aside from circulation dollars. For instance, the notion that Craigslist has killed newspaper classified revenues tends to have been overblown, but not by much. Clearly, newspapers were always in a position to head off the disintermediation wrought by Craigslist and other online listings sites.

These days, the rise of daily deals sites threatens to take away that last vestige of healthy advertising revenue, which is already facing some declines due to falling newspaper circulation. In its recent tally of ad spending in the first half of 2011, Kantar Media said that “free-standing inserts” fell by 6.4 percent.

The AP estimates that at launch iCircular will reach 5 million users, allowing newspapers to quickly broaden the 80 million newspaper readers who get pre-print circulars already.

But will it work?

“We’re not sure what we’re going to find from this test, but we’re going to be looking closely at several things in particular,” Junck said. “We’re going to be interested in seeing the audience numbers for iCircular and how often the deals are used. The newspaper partners have all agreed to do heavy promotion for this.”

In an interview with paidContent, Jeffrey Litvack, the AP’s GM’s/global product development, suggested that iCircular’s success may be rooted in what has propelled the daily deals space so far. “Most people find ads annoying, but circulars are ads that consumers seek out — it’s the ultimate opt-in,” he said.

About 20 national retailers are part of the launch, including jcpenney, Kohl’s Department Stores, Kmart , Macy’s, Staples, Target, Toys “R” Us, Walgreens and Walmart. Regional and local stores, such supermarkets and electronics stores are also participating.

“For retailers, they’re encouraged to sign on since they’ll be able to attract customers to local stores by automatically delivering geo-located deals and special offers nearest to the consumer,” Litvack added. “For smartphone users, iCirculars improves on the print coupon by letting them create shopping lists, as well as connect to social media and store loyalty card information. It’s simply more of what people already like and use.”

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