Looks like bad news in Q2 for newspapers and local TV
David Johnson July 25th, 2007
Second quarter earnings are starting to come in from the newspaper and local tv station owners, and the advertising exodus isn’t stopping. Scripps came in with higher profits, boosted from the cable networks, but was below estimates with print advertising revenues down in classified and local and also lower political advertising in the broadcast group (disclaimer: I work for Scripps). The New York Times doubled profits on the sale of their television group, but reported a 6.9 percent decrease in advertising revenue. Tribune Company saw a 59 percent drop in earnings, but managed to check falling revenues to only 7 percent due to cost-cutting measures. Unfortunately, the third quarter is not looking much better, and companies are already issuing warnings.
3 Comments Add your own
1. Hart | July 25th, 2007 at 6:11 pm
But there’s also this: “More than 59 million people (37.3 percent of all active Internet users) visited newspaper Web sites on average during the second quarter of 2007, a record number that represents a 7.7 percent increase over the same period a year ago, according to custom analysis provided by Nielsen//NetRatings for the Newspaper Association of America.” And this: “In addition to the numbers cited above, users continue to increase the amount of time they spend on newspaper Web sites. … According to Nielsen, users spent a combined 7.2 billion minutes browsing newspaper Web sites during the second quarter during nearly 1.4 billion total visits.” If you look at the numbers, the time-per-person trend line has climbed steadily since January 2004.
2. J Jonah Jamison | July 25th, 2007 at 7:34 pm
…and from all that traffic, newspapers were able to increase revenue enough to provide burled walnut paneling in the offices of select publishers. Staff reductions in the third quarter should also allow for parquet flooring.
3. David Johnson | July 26th, 2007 at 12:02 pm
@hart: all true. the issue at hand is that while online news sites are now raking in dimes instead of pennies, the original ink-and-paper products are still losing dollars. publishers are working overtime to adjust rates and show advertisers value for their buys, but a great deal of online advertising is bought at very low cost and spread over a great many sites by brokers like tacoda, double click, yahoo or google, who are grabbing a healthy chunk of the change that used to all go into the local media property pocket at the end of the day when they were the only show in town, and the town was the only market. the picture now is not so clear or easily defined.
now adserving companies are attractive buys to marketing companies or agencies like WPP, but most media companies/publishers are outsourcing or partnering for a significant portion of their adserving, verticals, or local search. only a few years ago, the newspaper/broadcaster was an essentially vertical solution for local advertising and marketing with multiple products, in house creative and account management, and a slate of solutions to reach targeted audiences. today, reps and advertising managers have a hard time explaining online, let alone giving a client the customer satisfaction or intelligence they need to effectively manage campaigns and compete against major nationals who have entire departments to figure it out for them.
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