As if the New York Times doesn’t have enough to worry about, with total advertising revenues down 32 percent in the second quarter, its online business is deteriorating as well. In its earnings announcement this morning, the company breaks out Internet advertising revenues of $68 million, which is a 15.5 percent drop from a year ago.
The year-over-year declines keep getting worse, as you can see in the chart above. In the last three quarters the annual decline went from a 3.5 percent drop in the fourth quarter of 2008 to a 6.1 percent decrease in the first quarter of 2009 to negative 15.5 percent this quarter.
Annual Decline In Internet Advertising Revenues
4Q08: -3.5%
1Q09: -6.1%
2Q09: -15.5%
While the $68 million is a fraction of the NYT’s $454 million in total advertising revenues in the quarter (and an even smaller portion of the company’s overall revenues of $702 million, which includes circulation and other sources), the NYT is a bellwether when it comes to media sites on the Web. And if it can’t stem the bleeding on the Web side of its business, other publishers are likely having trouble as well.
There is one glimmer of hope, however. On a sequential basis, compared to last quarter, the NYT’s Internet ad revenues were virtually flat ($68.0 million vs. $67.6 million). And the company as a whole was able to eke out a profit of $21 million, but only because it slashed $132 million worth of costs. And Classified advertsing revenues were down 45 percent. So it is still very much in the woods.
Mainstream media should allow free commenting, and more prominence for comments. Comments should appear as soon as posted, so that people visit again to see any replies to their comment. And author of news participating in comments would be great, they will have to come down the pedestal sooner or later.
Here’s an idea: Maybe they should stop using the darn network ads and do their own sales in-house. Then they can have 2-3 companies sponsor them at any given time, instead of useless DoubleClick crap, and set their own price.
Looks like the sell their own ads on the global edition http://global.nytimes.com/
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They have a large direct sales force that is supported by numerous ad operations and inventory managers. The problem is 100% definitely NOT because they are choosing to use networks instead of direct.
The main reason why this is occurring is because the economy (I know, I’m captain obvious) but I would wager that in 2010 all of there online ad revenues go up as many agency friends of mine say brands are putting more into digital budgets.
Shentell’s blunt; clumsy takeaway is that “old media” is losing out to new media.
Simply not true.
Why? Because NEW media (blogs like TC) aren’t gaining in ad revenue share. This blog isn’t picking up ad revenue from car dealerships, credit card companies, banks, etc.
Everyone is suffering. The economy is taking. And new media isn’t the answer. Not in this format.
Advertisers aint gonna put big bucks into this blog cause the kiddies who read it don’t have any money. They’re all in school and selling pizzas during the weekend.
Calm yourself, Shoentell.
They do sell their own premium ads; the non premium is filled by blind buys on ad networks.
The competition in the internet advertising world is getting intense every day. NY Times needs to really step up in order to survive in this competitive market.
your graph makes it appear to have dropped .155 percent instead of 15.5% IMO.
Agreed.
Looks like someone at TechCrunch attended the Verizon school of math. 0.16% != 16%
Ditto that! I was just about to comment on that… you beat me to it.
I think the obvious reason is that companies are realizing that “advertising” is no longer very effective and they’re choosing to spend their marketing dollars in smarter ways.
I think many publications that rely on ad sales as their main source of revenue are experiencing the same thing. I just posted this discussion topic in a new online marketing community: Marketing’s Market Conversation ( http://idiomstr...x.php?topic=4.0 ). Come join the discussion.
Scary. Good news for the company as a whole though, net income was up 18MM to $39.1 this quarter on a YoY basis.
This seems to be the opposite trend from most media outlets, where the internet is carrying a loss-leading publication.
Does anybody know how much of this is due to traffic, as opposed to ad rates? It wouldn’t surprise me if their traffic was down relative to last year: the election was driving a lot of visits then, and the news has been pretty depressing lately. That their numbers are flat quarter-to-quarter suggests it’s not rate-related.
Let me understand. Might this be in any way related to all the noise about reintroducing charges for users who want to read the NYT online? By announcing this, you’re effectively warning advertisers that your audience is going to shrink. If you’re an advertiser, and you have alternatives where traffic is growing instead of shrinking, why bother staying with the NYT, even now?
the news papers provide a great service, they should figure outhow to monetize their presence in other sites.
How come they all dont come together and sue google and yahoo and the plethora of leech sites that simply find the work these guys do.
If this doesnt happen, newspapers will go back to charging for content. The trouble with papers is that they present a fragmented front. Of course once they unite they will find easier to charge us – thus alienating us whove become accustomed to ree news- rather than google who is profiting by their work thru add content. In a not so distant parallel universe google wouldhave gone the way of napster on this issue. And I still wish it happens.
NYT are you listening? of course not, that would be off character.
The trend is actually getting better, I own a number of sites that survive only on display/text ads and although I don’t get the traffic of the NYT, I can say that April was the bottom, and that July is looking to bring in about the same we did last November, a significant increase over May and June. Lets hope this trend continues.
They will do better if they start their own ad network. Their brand value is lot higher than other publishers using the network, and advertisers will pay for it.
that is unbelievable!
This is a glimpse of things to come for the entire Internet advertising bubble. When money is cheap, business is about spending money to make money, advertising being the prime beneficiary. Those days are over. It will be a vicious circle on the way down… just have a look at the banner ads here on TechCrunch… most of them are for businesses that themselves depend on advertising!
Well, this is not good news for online based newspapers.
It’s an indicator of whether or not traditional papers can survive the crisis by shifting the business onto the web.
Seems still a long way to go.
One more thing: being on the SUL of Twitter may not be that revenue producing?
Any idea when this downtrend will end?
I wonder how much of the decline is due to slower ad sales at NYT’s About.com?
was wondering same – but it’s not about About, they are holding up far better than the rest:
Total About Group revenues declined 5.1 percent to $27.1 million from $28.6 million due to lower display advertising, partially offset by higher cost-per-click advertising.
Total About Group operating costs decreased 13.2 percent to $16.9 million from $19.5 million. Excluding depreciation, amortization and severance, operating costs decreased 12.7 percent to $14.1 million from $16.1 million mainly because of lower marketing expenses, compensation and professional fees.
Operating profit rose 12.2 percent to $10.2 million from $9.1 million. Operating profit before depreciation, amortization and severance increased 4.6 percent to $13.1 million from $12.5 million, due to lower expenses.
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When the Times decided to abandon all pretense of objectivity and its editorial policies spilled into the rest of the paper it was doomed. What does this have to do with ad revenue? Just this – when you have thrown away a substantial part of your potential readers there is no room for growth. Would Toyota start an ad campaign aimed at insulting Republicans so that they wouldn’t buy Toyotas? Of course not! But the Times did just that – and lost its credibility along the way. Pinch Salzburger is a terrible manager, and is running the paper in no the ground. No in pace requiescat!