Archive for July, 2010

McClatchy shows ‘hope’ despite 83% revenue fall

Friday, July 30th, 2010

So, this is good news these days? “Despite an 83 percent drop in net income, the results announced Thursday offered at least one sign of hope: McClatchy’s ad revenue, its lifeblood, fell by its lowest rate in more than three years.”

The report by the AP’s Mike Liedtke says McClatchy’s 8 percent fall in ad revenue is the best performance since a 5 percent decline in the first quarter of 2007. But, as he also points out, today’s year-to-year comparisons are against poor performances. That’s 8 percent less than a number that was bad to begin with.

Net income for the quarter was $7.3 million, down from $42.2 million a year ago. Total revenue fell 6 percent to $342 million, the AP says.

The company is blaming the earnings plunge on “higher interest costs as we extended debt maturities,” according to the Sacramento Business Journal’s report.  Interest payments for the quarter were up 44 percent to $49 million compared to $34 million at the same time last year after restructuring in February that extended repayment to 2017.

McClatchy was struggling with a debt of $1.8 billion as of the end of June, the SBJ says.

The company also sold about 200,000, or 8 percent, fewer copies of its weekday newspapers this past quarter, though higher prices eased that hit a little.

McClatchy management projects a 4 to 6 percent revenue decline year-to-year for the coming third quarter.

“While the economic recovery hasn’t been robust or smooth, we believe it is beginning to spread across the markets we serve,” CEO Gary Pruitt said, according to the AP report.

Employment advertising, half of which is online these days, was up 1.5 percent in May, marking the first month of growth in employment advertising revenue in four years, the SBJ says. Employment advertising rose 0.8 percent in June.

Ease of access more important than accuracy

Thursday, July 29th, 2010

More people rely on the Internet for news, as opposed to print newspapers, but they don’t trust what they read there, a new survey by the the University of Southern California Annenberg School for Communications and Journalism’s Digital Future Project.

For the first time, fewer survey respondent – 56 percent – ranked newspapers as  important or very important sources of information for them than those who said the Internet (78 percent) and television (68 percent) were important or very important sources of information. The number for newspapers was down from 60 percent in the school’s 2008 survey.

But, 61 percent of Internet users said less than half of online information is reliable, and 14 percent said that little or none of it is reliable. The latter figure is up from previous years, according to Media Daily News.

Looks like ease of use – the computer, TV or mobile device people are connected to anyway vs. a different copy of the newspaper arriving in the driveway each day – is more important that the information itself.

More than 20 percent of respondents said they would not miss the printed newspaper.

The downward spiral in print newspaper circulation no doubt will be accelerated by  advances in online delivery of news content through e-readers or other handheld electronic devices,” Jeffrey I. Cole, director of  the school’s Center for the Digital Future, said in a statement quoted by Editor & Publisher. “After years of aborted attempts, these advances finally appear to be practical and  affordable methods of providing electronic news content to readers.  If so, what will that mean for  the future of the traditional print newspaper?”

Meanwhile, 70 percent of Internet users said online advertising is “annoying,” and half said they never click on Web ads. But 55 percent said they would rather put up with Web advertising than pay for content.

Magazines ad sales on the rebound

Wednesday, July 21st, 2010

CNBC says monthly ad sales for August magazines jumped 10 percent, which is the first month of 10 percent year-over-year growth in nearly six years.

“Though the percentage increase is certainly off some weak numbers last year, it does indicate that the weak industry is stabilizing,” the cable channel says.

Crains says that luxury magazines are also making a slow comeback, pointing to Vogue, which will show a spike of 100 advertising pages, or 23 percent over a year ago, for September.

“But even 23 percent growth for the September issue — in which designers and fashion companies display their next season’s lineups — barely puts Vogue back in the league it was in a few years ago,” Crains says of the Conde Nast title.

This year’s number translate into 529 ad pages, while Vogue’s September 2007 issue had a record 727 ad pages — and weighed in at four pounds, nine ounces.

But, the New York Post points out that Vogue still can’t touch InStyle.  “InStyle, one of the few to have a good September a year ago, was up 56 pages and 16 percent with 403 ad pages,” the Post says.

“Since January, however, InStyle, Publisher Connie Anne Phillips has sold 1,791 ad pages, up by 306 pages, or 21 percent, from a year earlier.”

Elle sold 57.2 more ad pages for September 2010 compared to 2009, and is up 10 percent year-to-date, “the slowest of any of the major fashion titles,” according to the Post. Harper’s Bazaar sold 31.8 more ad pages this September compared to last, and is up 13 percent for the year.

Street no longer buying ‘cost-cutting’

Tuesday, July 20th, 2010

Editor & Publisher’s Mark Fitzgerald takes a look at Gannett Co.’s second-quarter earnings and says in his Fitz & Co. blog that simply cutting costs, which for the most part means laying off staff, no longer flies for newspaper publishers.

“The Street will no longer be satisfied with earnings pumped up only by continual cost-cutting. Gannett (GCI) handily beat Street estimates of earnings – but its overall earnings, in a quarter when its broadcast properties were humming nicely, was down 1.6%. … GCI got hammered for those results Friday, falling more than 10 percent.”

Gannet’s print and circulation revenues were down for the quarter also.

Other publishers’ stocks are also down as their 2Q reports come in the next several days, Fitzgerald says.

Gannett joins Yahoo! newspaper ad group

Monday, July 19th, 2010

Gannett announced Friday that it would begin selling  targeted display ads to run on Yahoo! and sites for its 81 newspapers and seven of its broadcast stations nationwide.

The deal adds Gannett, the nation’s largest newspaper publisher, to an advertising consortium that includes more than 800 members, according to Online Media Daily. McClatchy newspapers, the third-largest publisher, was one of the first members of the consortium, formed in November 2006.

Like other publishers in the deal, Gannett may also provide local content for Yahoo! properties in the U.S., including the Yahoo! homepage.

To date, the consortium has sold more than 40,000 ad campaigns onto Yahoo! totaling more than $100 million in sales to date, according to Lem Lloyd, vice president of channel sales at Yahoo!,” says Online Media Daily.

Yahoo’s publishing platform enables “local newspapers to target consumers according to geographic, demographic and behavioral factors in ads that appear on Yahoo! properties from mail to sports to news.”

Yahoo!, which at the time was being run by former Knight Ridder executives, said at the launch of the program that it was teaming with newspapers because they already had local advertising staffs.

Local advertising accounts for about half of the $245 billion in total U.S. ad spending, Online Media Daily says.

Gannett announced in May that it would begin to sell online marketing services, another program adopted earlier by McClatchy. GannettLocal offers search engine marketing, e-mail, digital display, website and geo-targeted print/flyers.

USAT jumps shark with full-paper wrap

Wednesday, July 14th, 2010

At least USA Today had a more-or-less straight-forward explanation for its 1A ad that wrapped the whole paper on Monday:

“Lee Jones, evp, advertising, USAT, said that in the past, concerns about editorial integrity, production and circulation deterred USAT from selling ads that wrapped the paper, but that market demand and quality of the ad allayed those worries,” MediaWeek reported.

As to “editorial integrity” versus “market demand,”  the  wrap promoting Jeep’s 2011 Grand Cherokee will bring in $1 million in a deal that includes presence on the newspaper’s iPad app and Web site.

The ad marked the first time the Gannett flagship had wrapped its news section with an ad. The wrap completely obscured the paper as shown through the window of outdoor racks, MediaWeek said.

USAT wrapped its Life section with a Verizon ad July 1 and recently introduced other front-page ads that do not obscure editorial.

Condé Nast lowers ethics bar for online staff

Monday, July 12th, 2010

Condé Nast has found a hole in the wall separating editorial from advertising, and will have its online staff produce a six-page advertorial supplement to run in several of its magazines.

The ad supplement will promote Samsung and run for eight months across Wired, Bon Appétit, Vanity Fair, Condé Nast Traveler, Architectural Digest and GQ.

Having the online staff produce the supplement was seen as a way  “to avoid ruffling the feathers of print editors, who are seen as more sensitive than their Web counterparts to being asked to serve up content on a directive from the advertiser,” MediaWeek says.

“Condé Nast insisted that editors and writers had free reign to select and reject content for the Samsung insert,” Paid Content says in its report.

Condé Nast did the same thing a few years ago for a section promoting Microsoft.

“Advertisers like advertorials when they contain original edit, because they can direct the theme if not the actual content, ensuring it’s relevant to their message,” MediaWeek says. “Meanwhile, the publication technically is abiding by American Society of Magazine Editors rules because it has the final say over the edit content.”

As best we can tell, MediaWeek means Condé Nast is abiding by the rule, technically, that says: “In order for a publication’s chief editor to be able to monitor compliance with these guidelines, every effort must be made to show all advertising pages, sections and their placement to the editor far enough in advance to allow for necessary changes.” But not necessarily: “A magazine’s editorial staff members should not be involved in producing advertising in that magazine.”

McClatchy signs for exclusive Groupon deals

Friday, July 9th, 2010

McClatchy newspaper websites will begin presenting exclusive daily deals on local goods, services and cultural events through the Groupon shopping website, Editor & Publisher reported recently.

The Sacramento and Kansas City sites will get them first, and the program will roll out to the rest of the chain over the next few months.

The agreement provides a key component in McClatchy’s local marketplace initiative designed to bring together consumers looking for bargains and merchants seeking increased sales,” E&P says.

“For Groupon, the agreement is part of a larger initiative to offer a new, incremental revenue stream to major publishers.”

Groupon negotiates discounted deals with local businesses, and then sends free e-mail alerts to subscribers. Deals are activated if a minimum number of people agree to buy, which encourages subscribers to share the promotion with others via social media tools.

McClatchy D.C. Bureau drops polling

Thursday, July 8th, 2010

Budget cuts at McClatchy Newspapers  mean the Washington D.C. bureau will drop its contract with Ipsos, which has conducted polls for the news outlet for years, Media Matters for America reported today.

Ipsos had conducted about one poll a month for McClatchy, usually about politics, Robert Rankin, McClatchy’s government and politics editor, told MMA’s Joe Strupp.

“The budget requires that that relationship comes to an end,” Rankin said. “… This hurts. We are staffing (political coverage) at about the same level. But we can’t cover the absence of polls. There is no way to replace them.”

“McClatchy’s move is not unique,” Strupp writes. “Numerous news outlets in print and on air have been cutting back on the use of polls, most citing budgetary needs.”

Gannett experimenting with paywalls

Wednesday, July 7th, 2010

Gannett has initiated a “small-scale test” of paywalls at three of its smaller newspapers’ websites “to help [the publisher] develop [a] long-term strategy for paid content,” according to a report from Poynter’s Bill Mitchell.

The sites for the Tallahassee Democrat, The Greenville (S.C.) News and The (St. George, Utah) Spectrum are charging $9.95 a month for online-only access. The fee for web access bundled with a print subscription varies by market.

Gannett’s Kate Marymont, vice president of news for Gannett’s Community Publishing Division, told Mitchell the company targeted sites with niche content – such as Clemson football coverage in Greenville and Florida State football in Tallahassee.

“We want to test the idea that our journalism is more of a service than a product, and that we should give readers a selection of delivery methods,” Marymount said.

Robin Pence, Gannett’s vice president of corporate communications, said the company will use what it learns from the test sites “to help us develop our long-term strategy for paid content.”