Meredith Digital Ads Will Balance Print Losses

Women’s interest publisher and broadcast TV owner Meredith Corp. is on the cusp of an historic transition, as growth in revenues from the company’s digital advertising business will more than offset the decline in revenues from legacy print ads, according to CEO Steve Lacy, who revealed the impending milestone in an interview with the Financial Times.

Meredith’s results were flat in the second quarter, as growing digital ads balanced out print drops — already a noteworthy achievement in itself in the challenged publishing environment. Better still, the trends are heading in a positive direction in the long term.

Digital advertising contributed around one-third of Meredith’s total ad revenues of $137 million in the company’s last quarter, up from around 25% during the same period last year. That includes a 20% increase in digital ad revenues at its broadcast TV division, and a 15% increase in digital ad revenues at its magazine publishing division.

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While print currently still contributes around one-third of total ad revenues, Lacy predicts it will continue shrinking at a rate of around 4%-6% per year. But rapidly expanding digital ad revenues should allow Meredith to grow the bottom line in the coming year.

Already, total revenues for the first six months of its fiscal 2016 are up 2.7% to $791 million, due not only to digital advertising, but also increased circulation revenues.

On a related note, Lacy divulged that the company currently has a combined audience of 75 million unique visitors per month, and is on course to reach 100 million unique in the near future through organic growth and acquisitions.

News of the milestone comes not long after Meredith terminated a planned merger with Media General, which backed out of the deal in favor of a rival offer from Nexstar. In the wake of the canceled deal, Lacy said the women’s interest publisher is considering splitting its broadcasting and publishing units, although the potential separation would take some time.

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