L.A. Times outsources all display ad makeup

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    AdOut, a company born on a kitchen table in a San Fernando Valley apartment 11 years ago, has signed a deal to produce 100% of the ads that the Los Angeles Times typesets.
    The contract to transfer almost the entire ad production operation to the Van Nuys, Calif., firm represents close to 50,000 standard advertising units (SAUs) per week, according to Jeff Turner, 37, president and CEO of J.J. Grace Inc., AdOut's parent company. AdOut, which already was producing about 20% of the Times' pub-set ads, also is responsible for the production and design of all retail and classified display advertising for the Los Angeles Daily News and the Torrance Daily Breeze in suburban Los Angeles.
    Turner's partner, Joe Beaver, 35, says the Times contract will double AdOut's revenue but refused to disclose it. AdOut is ordering more than 100 Macintosh computers and doubling its staff the equivalent of 150 staffers, most of them graphic artists. Beaver says the Times job involves "highly creative visual work for high-end advertising accounts."
    "We have enjoyed an excellent working relationship with AdOut since 1989," says Mark Kurtich, Times senior vice president of operations. "AdOut has perfected the process in which display ads are created. They have made efficient use of technology and innovative production techniques a core competency that is unmatched in this industry."
    Kurtich says AdOut has a 98% accuracy rate on first-proofs.
    The deal will have little impact on Times employees, says Kurtich, suggesting job losses at the Times affiliate that has been performing the work: "We already had outsourced all this work to another company we own. We're moving the work to AdOut since they have more expertise in this area. This is a bigger deal for AdOut than for us. It's a kind of Level 2 outsourcing for us."
    Kurtich says the Times will continue to do a lot of its own ad preparation for its smaller products.
    Turner calls AdOut's process for producing newspaper ads Deliberate Production by which "our designers are extensively trained in the process, and the results are fewer mistakes, better ads and happier clients." The method, he says, has enabled the company to produce more than 750 ads a week for the Daily News with a 99.85% accuracy record.
    "If newspapers trust you to take over creation of one of their most valuable financial assets," Turner says, "they have every right to expect perfection and ontime performance."
    Holder of a master's degree in graphic arts, Turner began his business in a one-bedroom apartment in the valley. "The place had precious little work area but enough thinking room," he recalls. Early on, Turner was joined by Beaver, now chief marketing officer, a fellow graduate of Grace College in Indiana. They combined their first initials and added their alma mater to make J.J. Grace Inc.
    Last year, Inc. magazine listed AdOut and its five-year, 645% sales growth among the 500 fastest-growing U.S. companies. A third partner is Stuart Smith, 38, chief financial officer.
    "Some day," Turner muses, "we must commission a portrait of the mythical J.J. for the lobby. He would be proud of the company."