• by Gavin O'Malley  @mp_gavin, February 8, 2011

While not enough to offset greater losses, McClatchy on Tuesday said digital ad revenue grew 5.1% in the fourth quarter. Digital revenue made up 17.8% of all ad revenue during the quarter -- up from 15.8% year-over-year. 

"Our digital advertising revenue was up 2.4% for all of 2010," McClatchy Chairman and CEO Gary Pruitt said Tuesday. "In 2010, digital ads represented 18.1% of our total advertising revenue."

McClatchy -- owner of The Miami Herald and The Sacramento Bee -- said its local daily unique visitors continued to grow strongly, up 13.1% in the fourth quarter and 17.3% for all of 2010.

Overall, quarterly revenue was down 5.9% year-over-year to $369.9 million, while ad revenue was down 6.9% to $287.4 million.

In December, the company received a cash dividend of $24.3 million from its investment in Classified Ventures, which operates Cars.com and Apartments.com.

Eyeing affiliate dollars, McClatchy last year partnered with hot daily deal site Groupon. Per the collaboration, Groupon will distribute content about shops and deals only available to 28 of McClatchy's local Web sites.

Affiliate revenue is a no-brainer for McClatchy; chairman and CEO Gary Pruitt has stressed his preference for advertising over subscription pay walls.

"The declines in retail and classified advertising were similar to our third-quarter year-over-year declines, but the decline in national advertising revenues accelerated," Pruitt said on Tuesday. "National advertising is a volatile advertising category, and while it helped our trend earlier in the year, that momentum, unfortunately, did not carry into the fourth quarter."

In January, McClatchy said ad revenue was down 10% year-over-year, with all major categories down. As a result, the company says it has increased its ad sales efforts and initiated expense cuts at its worst-performing newspapers.