Archive for April, 2011

Newspaper shrinkage ‘will continue’

Wednesday, April 27th, 2011

Henry Blodget and Kamelia Angelova, using The New York Times as the example, lay out for Business Insider how newspapers are bound to disappear — complete with a colorful illustrative graph.

“Its core business, the print newspaper, is shrinking, and its digital business, however successful, cannot replace the lost revenue and profitability of the print business. … And despite the enormous cost cuts the company has made since the early 2000s, its operating profit — even in a recovery year like 2010 — doesn’t approach the fat years of a decade ago.

“Unless the New York Times Company can figure out a way to turn around the print newspaper circulation revenue (highly unlikely), this shrinkage will continue.”

McClatchy lost $2M in first quarter

Wednesday, April 27th, 2011

McClatchy Newspapers lost $1.96 million in the first quarter of the year on an 11 percent drop in advertising revenue, though indicators elsewhere are that the economy is getting better.

Media Jobs Daily reminds us that the publisher lost $2 million in the first quarter of 2010, too. And, as Rachel Kaufman writes: “Doesn’t look good.”

As the company’s slump deepens, the Associated Press says part of the problem is that seven of McClatchy’s newspapers are in California and Florida, two of the regions where the downturn in housing prices has been sharp. And, of course, the advertising shift from print to the Internet also continues to hurt.

The 1Q report actually shows that McClatchy’s digital ad revenues grew by  2.2 percent compared to the first of 2010, and were 20.1 percent of  the quarter’s total advertising revenues, up from 17.5 percent in the first three months of 2010.

Overall revenues for the quarter were $303.7 million, down 9.5 percent from 1Q 2010. Advertising revenues were $225.1 million, and circulation revenues were $66.2 million, falling 5 percent.

“The slowing in advertising revenue that we previously reported for January continued through the first quarter,” CEO Gary Pruitt explained. “National advertising continued to be one of the largest areas of decline, falling by 29.3 percent in the first quarter of 2011 compared to 2010. In addition, the shifting of the Easter holiday to a later date in April 2011 compared to 2010 had a negative impact on retail advertising in March. As a result, advertising in March was down 12.7 percent, pulling down the overall ad revenues in the quarter to an 11 percent decline.”

Here’s a good idea from Pruitt, who took home $3.71 million last year, including a $1.85 million bonus: “In response to this year’s weak start in advertising, we have increased our ad sales efforts companywide … .”

On the other hand, he also says much of the lost revenue is not coming back. “I would say that we need to recognize that a big piece of that [a structural shift to digital marketing] is structural and permanent, and therefore we need to make sure that our expense structure is reflecting that and is permanently reduced as well.”

McClatchy eliminated nearly 540 full-time jobs in the first quarter of 2011, a nearly 9 percent reduction from the same time last year, the Associated Press said. The company has also consolidated computer systems and printing among newspapers and hired contractors in place of staff.

McClatchy tosses to UK firm for ad systems

Tuesday, April 26th, 2011

Folks in McClatchy Company advertising departments can look forward to time lost in training sessions as the whole company moves its advertising and accounts receivable system off-shore to a hosted system for managing the booking, billing and placement of all print and digital ads.

The newspaper publisher’s “major managed services contract” is with Atex,  an integrated content management and advertising solutions firm headquartered in Reading, Berkshire, in the United Kingdom.

The News & Observer in Raleigh, N.C., will be the first of McClatchy’s 30 daily newspapers to use the hosted software in a project to be completed this fall, News & Tech said.

McClatchy staffers will eventually manage all order entry, financial accounting, customer relationship management, ad layout and classified pagination from a single database.

Adoption of the new system is to standardize advertising workflows and establish common processes across newspapers and other publications to reduce operating costs, streamline advertising processes, and enhance revenue potential with targeted print and digital ad packages, the companies say in a news release.

The  McClatchy system will be hosted at an Atex SAS-70 approved data center to lower costs and consolidate IT infrastructure, the release says.

Newspaper ads still get most action, survey finds

Tuesday, April 19th, 2011

Newspaper advertising is still where people turn to plan, shop and make buying decisions, says a  survey sponsored by the Newspaper Association of America.

The survey (.pdf) of 2,500 adults by Frank N. Magid Associates found that four-in-five adults (79 percent) said they “took action” as a result of newspaper advertising in the past month. This included clipping a coupon, buying something, visiting a website for more information or trying something for the first time.

Preprints are extremely popular, the survey found, with 90 percent of adults saying they regularly or occasionally read Sunday inserts; for the full week the figure stands at 79 percent. Over the course of 30 days, 79 percent of respondents acted on newspaper preprint advertising.

When researchers compared newspaper ads to other media as a “primary medium for checking advertising,” they found newspapers on top at 35 percent, followed by the Internet at 28 percent, direct mail at 12 percent, television at 9 percent and other media in lower single digits.

Online advertising matures, tops old media

Thursday, April 14th, 2011

Online advertising grew at a double-digit rate despite the economy last year and eclipsed newspaper advertising for the first time, the Internet Advertising Bureau and PricewaterhouseCoopers LLP said this week.

Revenue from ads on the Web rose by 15 percent in 2010 to $26 billion, topping newspapers at $22.8 billion, cable TV networks at $22.5 billion, broadcast TV with $17.6 billion and radio with $15.3 billion in advertising revenue, according to the Dow Jones Newswire review of the report.

The  Newspaper Association of America put total print newspaper advertising at $22.795 billion last year, an 8.2 percent drop compared with 2009. Online advertising at newspapers grew by 10.9 percent in 2010, to $3 billion, about 13 percent of total ad income.

“We now have had five consecutive quarters of growth since the great recession impacted interactive advertising in 2009,” Sherrill Mane, IAB’s senior vice president, industry services, said in the IAB’s news release introducing the online revenue report. “The record-breaking revenue in Q4 2010 and the total year indicate that interactive advertising has weathered the storm and then some.”

Search is still the largest online ad category with 46 percent of revenue, but display advertising on the Web grew by 24 percent “in a sign that major brands are growing more comfortable with the medium as a place to invest their marketing dollars.”

Facebook’s future to be driven by old folks

Tuesday, April 12th, 2011

Facebook use, already topping 600 million users worldwide, continues to grow, and eMarketer says it will grow primarily with through a boost from older users catching on.

Facebook will have more than 132 million U.S. … users this year – a pretty hefty jump from just shy of 117 million last year,” writes Tom Johansmeyer on Social Times. “By 2013, Facebook’s domestic user base could be as high as 152.1 million. From 2009 through 2013, that represents a compound annual growth rate of 10.3 percent.”

eMarketer says “teens and young adults will continue to form the core of Facebook’s audience, with penetration rates among these groups ranging from 80 percent to 89 percent of internet users by 2013.” But its growth “will be driven primarily by increased Facebook use among older boomers and seniors.”

Says Johansmeyer, “The future of Facebook involves blue hair and bingo.”

Facebook will also continue to be a growing part of the business world. “Marketers are a big part of this evolution,” eMarketer says in the summary of its $695 report. “Whether through brand pages, display ads, viral videos, Facebook Login or the ‘like’ and ‘share’ buttons, marketers are finding multiple ways to tap into the Facebook juggernaut. This activity will continue as the audience grows in numbers, demographic diversity and sophistication.”

Turner cable tying ads to shows’ content

Monday, April 11th, 2011

Time Warner has spent four years developing the ability to place commercials written to play off of a precise moment in the story of the show they run in for its Turner channels, Ad Age reports. The idea is to “make … commercials more indistinguishable from the programs they … interrupt.”

“Turner is ‘tagging’ specific moments in movies and series, trying to find dialogue, action or themes that echo a message an advertiser might like to promote, and then creating related ad vignettes that’ll appear in the spaces between when a program segment ends and a commercial break begins,” the magazine says.

The Turner cable project is targeting advertisers in programs on TBS, TNT and Tru.

For example, an ad that shows men hitting golf balls at a range would be created to run during TNT’s “Men of a Certain Age,” in which the lead character played by Ray Romano is trying to make the Senior Tour.

Over at AMC, they ran commercials for Unilever products during “Mad Men” last season that copied the style of the show and, like the show, were set at an early 1960s-era ad agency.

A source told Ad Age that the Turner cable unit has invested a “seven-figure sum” building new software and hiring staff to tag specific segments in movies and TV shows run on the various channels.

Viewers are 25 percent more receptive to ads that play off of  a show’s content compared to standard commercials, research conducted for Turner found.

A viewer “could be zooming through” with a DVR, but if the advertising looks like the content the viewer tuned in to see in the first place, “they are trained to stop and watch it,” said Linda Yaccarino, exec VP and chief operating officer of Turner Entertainment ad sales, marketing and acquisitions.

News sites: Will annoy for cash

Monday, April 11th, 2011

Media Bistro’s 10,000 Words blog presents 5 Annoying News Site Ads and Why to Avoid Them, saying newspapers are hurting themselves with their online ads.

“It’s one thing to sell advertisements, and it’s another thing to annoy your visitors with them,” writes Meranda Watling. “Want to know the easiest way to get a reader to exit a webpage? Post an ad that detracts from your content and talks (or sings — true story), jumps in the way of the content, moves around so it can’t be closed, crashes browsers or floods users’ CPUs with an abundance of pop-overs and -unders complete with seizure-inducing animation and headache-inducing jingles.”