Ad spending has increased in newspapers since a year ago August. The third quarter was particularly kind to most of the big newspaper publishing companies, with all but a few showing slight or moderate growth. That's mostly held up in the latest round of monthly revenue reports, but there's one lagging indicator that's been dragging down classifieds, ad it's one of the biggest cash-flow generators for every newspaper: Help-wanted.
Real estate and automotive, the other two parts that make up classified advertising, have been doing well and they've done all they can to turn the category positive. But employment advertising went south with the jobs and they haven't come back yet. Newspaper executives have been content with thinking that now, in the fourth quarter of 2004 and nearly two years after the recession was supposed to be over, they might finally be seeing the bottom.
Another hint of employment growth - and for bottom line of the newspaper industry - was provided Tuesday by James Glassman, senior economist and managing director at investment house J.P. Morgan Chase in New York. Glassman said that he thinks that positive job growth is just around the corner.
"There are a lot of reasons to be hopeful," Glassman told the Advertising Research Foundation's annual Business Intelligence Forum, held Tuesday in midtown Manhattan. He said that the national economy was on its way to a real recovery, and pointed to the nearly 8 percent growth in Gross Domestic Product in the third quarter and predictions for a strong finish to the year.
Glassman acknowledged that job growth hadn't matched the burgeoning economy.
"We haven't had the growth that justified hiring," he said. Glassman said that employment was only just now going into positive territory, and said that it isn't sufficient yet to celebrate. He said that several months of 200,000 to 300,000 added jobs would then signal as close to full employment as the U.S. economy can probably get, which depending on who you talk to is either 4 percent or 5 percent unemployment, if not lower.
Meanwhile, one of the nation's biggest newspaper companies, The New York Times Co., said Tuesday that advertising revenues rose 3.9 percent to $202.03 million in October compared to the same period a year ago. October featured overall, if slight, increases in The New York Times, the New England paper unit (which includes the Boston Globe) and its regional newspaper group. But it also included $5.22 million in advertising revenues from the International Herald Tribune, which The Times recently acquired.
Without the International Herald Tribune, the company's October advertising revenues increased 1.2 percent to $196.81 million. Year-to-date advertising revenues without the Tribune rose 1.7 percent to $1.55 billion compared to the same period in 2002.
The New York Times total advertising revenue was flat, with $117.52 million in October 2003 compared to $117.07 million in October 2002. But in linage, which doesn't include the amount of money The Times receives for advertising, almost every category dropped. Retail linage dropped 4.9 percent (down 7.6 percent year-to-date), national fell 0.3 percent (down 1.5 percent), and classified decreased 12.5 percent (down 8.7 percent year-to-date). Zoned linage - which is mainly local advertising that doesn't appear in the full run of the newspaper - dropped 8.6 percent. That's also down 5.5 percent year to date. Only the preprint category was in the black, up 7.7 percent in October and 3 percent year-to-date.
At the New England Newspaper Group - which includes the Boston Globe and the Worcester Telegram & Gazette - the story was much the same. Linage fell in almost every category, with the exception of zoned ads (up 4.4 percent in October) and preprints (up 3.7 percent). Retail, national and classified linage dropped.
At McClatchy Co., which owns the Star Tribune in Minneapolis and the Sacramento Bee in California along with nine other daily and 13 non-daily newspapers, October advertising revenues rose 3.5 percent compared to October 2002. Year-to-date advertising revenues rose 3.7 percent. Revenues rose in Minneapolis and McClatchy's California and Carolinas clusters. The Northwest newspapers were flat.