Newspaper Ad Market Softens In July

Less than a week after the newspaper industry reported healthy second quarter ad sales gains, some of the nation's largest newspaper companies have begun reporting mixed results for July.

While Gannett, Tribune Co. and Media General each reported higher ad sales in July, The New York Times Co. was flat and Knight Ridder and Pulitzer Inc. each declined.

Gannett, the publisher of USA Today and other big regional newspapers, saw national advertising grow 5% and classified grow 3% compared to the same period a year ago. Total advertising revenues increased 2% to $362.94 million. Gannett said the strength was due to a 2% increase in ROP volume and a 4% rise in preprint distribution. Small- and medium-sized advertisers drove the increase at its newspapers. USA Today's ad revenues rose 1% on 3% fewer ad pages. Gannett also said that looking forward, it expected ad revenues to be up mid-single-digits for the rest of the year but ad spending could be softer than predicted.

Tribune Co., which owns the Los Angeles Times and Chicago Tribune among others, saw advertising sales rise 3.3% to $270.98 million during the period. Retail was particularly strong, up 6%, due to gains in most of the categories. High-tech and financial categories drove national ad revenues up 2%, though both the movies/entertainment and automotive sectors were soft. Tribune's classifieds were flat because of a 10% fall in help wanted ads.

A smaller company, Media General, had its strongest month of the year in July, outpacing a strong June. The company, which owns the Richmond Times Dispatch as well as other papers in the Southeast, said advertising revenue grew 5.7% to $39.52 million in July. That's atop a 5.5% increase in June. Newspaper classified revenue dropped 5.8% in July to $900,000, mostly due to a 3.5% drop in help-wanted advertising. National revenue increased 25.2% to $585,000 on the strength of telecom ads.

The New York Times Co.'s advertising revenue rose less than 0.2% to $146,590 for the period, mostly due to a 7.2% drop in ROP advertising at The New York Times. The New England Newspaper Group's advertising revenue dropped 1.9% although the Times' Regional Newspaper Group ad spending rose 3.2% in July.

Knight Ridder Inc.'s advertising revenue dropped 2.3% in July, weighted down by retail's drop of 3.4% and 6.1% in classified. Retail was particularly down in its large markets like San Jose, Calif., Philadelphia and Kansas City. Pulitzer Inc.'s advertising revenue dropped 0.7%, including a 2.5% drop at its St. Louis papers. Retail ROP dropped 1.1%, hurt in part by a weakness in the department store segment, and national advertising revenues fell 9.3% because of fewer telecom and travel ads.

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