In another sign that the new year will see healthy increases in ad spending, Gannett reaffirmed predictions it made at December's media conferences: A low single-digit growth in ad pages at USA Today, Gannett's flagship newspaper, and mid-teen growth in revenues at its TV stations.
Gannett handed out its share of good news Monday morning, with a 10 percent jump to $1.2 billion in newspaper advertising revenues in the quarter compared to a year ago. That shakes out to a 6 percent rise in ad revenues at newspapers Gannett owned in the fourth quarters of 2002 and 2003, an important metric on Wall Street that takes acquisitions and divestitures out of the equation. And it wasn't just revenues, which got strong performance from local, national, and classified ads. Ad volume rose 1 percent. USA Today's ad revenues leaped by 10 percent in the fourth quarter, and ad pages rose 1percent to 1,438 in the quarter.
But in telling the investment community that the company was confident that advertising would continue to rebound, Gannett Chairman/Chief Executive Officer Douglas C. McCorkindale said that it might not be a fait accompli.
"The improvement will not happen in the first quarter or the first half. Revenue growth will be gradual over many months," McCorkindale said during a conference call Monday morning. That tracks with at least one prediction of media spending, TNS Media Intelligence/CMR, which forecast heightened spending in the third and fourth quarters.
It was too early to tell how January would end up at Gannett, which owns 100 daily newspapers, a bucket of nondailies, and Internet sites. Data was a little clearer at its 22 TV stations, where January's pacings ended up with mid-single-digit growth and February's are tracking in the low single digits. Local advertising is stronger than national so far, McCorkindale said.
That's not to say that any quarter, such as the second, would be sequentially worse.
"I think we're going to see an improvement, but not quite as robust as we're putting in our headlines," McCorkindale said of the relatively good news on the economy in recent months.
Like most other media companies with footholds in print and TV, Gannett is expecting a lift from the 2004 election spending and the Summer Olympics to be held in Athens later in the summer. McCorkindale expects more revenues from the Athens Olympics than the TV stations received in the winter of 2002, when the Winter Olympics were held in Salt Lake City.
And Gannett's stations--in key election states like Florida, Michigan, and Missouri--would put them in line for a payday between now and the November presidential election. The stations received $50 million in political advertising in the fourth quarter of 2002 alone.