Digital advertising sales lift New York Times

23 July 2010
NEW YORK: The New York Times Company has delivered its first increase in quarterly revenues for over two years, largely as a result of a surge in digital advertising sales.

According to figures from the publishing giant - which runs the Boston Globe as well as the web portal About.com alongside the flagship news title - its income from digital ads rose by 21% in Q2.

This aspect of its operations accounted for 26% of quarterly advertising returns of $314.9m (€244.9m; £206m), with the internet's share of this total having grown by four percentage points year-on-year.

By contrast, the company's print advertising sales declined by 6%, an area that has now failed to generate an improvement since the final three months of 2005.

"These numbers clearly demonstrate the positive impact of transitioning into an increasingly multi-platform company," Janet Robinson, chief executive officer of the New York Times, said on a conference call.

"Our healthy online growth is coming in multiple categories - national display advertising, retail display advertising and also real estate classified advertising."

The specific contributors to this trend, Robinson continued, were the rising confidence observable among brand owners and the broader shift of marketing budgets to the internet.

"That was a hell of a quarter. The digital revenue just exploded," Ed Atorino, an analyst at Benchmark Co, said.

"Revenue was better than I thought and the bottom line was better than I thought."

Overall, the New York Times Company's revenues jumped by 1.2% to $589m in the second quarter, compared with the contraction of 3.2% experienced in Q1.

"Despite an increasingly competitive environment and volatile economic conditions, we believe that by staying committed to our brand promise of high quality journalism," Robinson argued.

"We will ensure The New York Times Company remains a dominant force in the media landscape."

In an effort to build on this momentum, the organisation intends to introduce a paywall to NYTimes.com, which is currently the most popular newspaper website in the US.

The system will utilise a "metered model", allowing consumers to access a limited selection of articles for free, before charging them a fee to read additional material.

It is also planning to roll out a "fully paid" application for Apple's iPad to supplement its existing free service, in a sign of the perceived importance of this rapidly-emerging channel.

Newspaper advertising sales fell by 11% to $5.3bn in the first quarter of this year in the US, the Newspaper Association of America has reported.

However, this marked a significantly stronger performance than the decrease of 29% registered in 2009, when totals slipped to a level not seen since 1984.

Similarly, the industry body revealed that online newspaper adspend leapt by 4.9% to $730.4m in Q1 this year, following on from a slide of 12% last year.

Data sourced from Financial Times/Bloomberg; additional content by Warc staff
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