Newspaper stocks surge as their own news improves
SAN FRANCISCO — Newspapers may have finally stopped — or at least slowed — their harrowing descent into a financial abyss after three years of plunging revenues, crumbling stock prices and shrinking staffs.
The latest glimmer of hope came Tuesday when Gannett Co., the largest U.S. newspaper publisher, announced that its third-quarter earnings will be substantially above analysts’ forecasts.
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But Gannett’s modest progress suggests newspapers might at least be able to recover some of the revenue lost since 2006. Analysts suspect a rebound could begin soon and accelerate next year, particularly if advertising for homes, cars and jobs picks up.
If that happens, newspaper profits should surge because publishers have lowered their costs dramatically by jettisoning thousands of workers, slashing wages and closing offices. Less advertising also means smaller print editions, reducing the need for newsprint — the industry’s second-highest expense after labor.
Via AP
Ad spending 2009: Even media is buying less media | Company Town | Los Angeles Times
How brutal is the advertising market? Even big media isn’t spending as much on big media.Advertising tracker TNS Media Intelligence this morning issued the grim news that ad spending plummeted 14.3% to $60.87 billion during the first six months of 2009 compared with the first half of 2008. The second quarter of 2009 became the fifth consecutive quarter to post year-over-year declines.
Among those cutting back on advertising was media itself. Walt Disney Co., News Corp. and Time Warner Inc. all reined in ad spending in the first half of the year. Spending by Time Warner was down 11.1% to $574.3 million; Disney expenditures were down 11.7% to $517.6 million; and News Corp. cut its ad spending by 6.9% to $672.3 million.
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Newspapers, magazines, television and radio all felt the pain of a dismal first half. Newspaper ad spending was off 24.2% compared with the first half of 2008; radio spending plunged 24.6%; television spending (including national network, local station, syndicated and Spanish-language outlets) was off 10%; magazine spending dropped 20.9%; and billboards and other outdoor media saw their ad revenues tumble 15.7%.
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The only growing media sectors were Internet display advertising and free circular inserts in newspapers. Internet display advertising increased 6.5% compared with the first half of 2008 while newspaper insert spending climbed 4.6%.
FT.com / Media – Murdoch hails electronic reading devices
Murdoch:
“Almost in every property at the moment [there is] a slight lift,” Mr Murdoch said. “It’s very much better than it was a couple of months ago. It’s everywhere,” he added, highlighting an 8 per cent fall in revenues at News Corp’s television stations in September, compared with an expected 20 per cent decline for the year to date.Mr Zucker was more cautious, but said: “There’s no question – advertising feels better.”
Via FT.com
Analysts: Newspaper Ad Recovery Stalled?
Wells Fargo analysts John Janedis, Jaime Morris and Brendan Metrano have thrown cold water on a potential advertising recovery in third quarter.
According to a note released on Gannett, the bellwether of newspapers, the team said ad revenue has stalled in August while September appears to be starting off weak.
Wells Fargo reduced its Q3 newspaper advertising revenue estimate for Gannett from a decline of 25.5 percent to a decline of 28.8 percent. Local is forecast to fall 22.5 percent, national is anticipated to drop 21 percent and classified is estimated to decrease 40 percent versus a previous -19 percent, -18 percent and -37 percent respectively.
Overall advertising revenue is expected to fall 20.2 percent in Q4, revised down from a decline of 16.9 percent.Wells Fargo maintains its “market perform” rating on Gannett NYSE: GCI. As of late morning, shares of GCI were trading up 12 cents to $8.04.
Content Bridges: Advance Partnership Signals Greater Microsoft/Newspaper Connection
MSNBC.com just paid several million to buy Everyblock, the much-watched Adrian Holovaty start-up, around local city data. Smart local interactive data should be a strong core of every local news(paper) site; it drives traffic and screams utility. The fact that MSNBC.com — co-owned by Microsoft and NBC — understands that opportunity better than newspaper companies speaks volumes. The deal also reinforces the notion, noted in the post below, that Microsoft will once again become a more dominant local, news-oriented player in the years ahead.
Advance Internet is announcing its new partnership with Microsoft. The new partnership — already launched in part — parallels the Yahoo Newspaper Consortium, but differs from it in one important respect.
What’s the same:
- Advance Internet’s own salespeople, and then the vanguard of its newspaper sales reps, will sell into the Microsoft Media Network, encompassing all the Microsoft sites. So, in essence, Advance will greatly expand what its sales teams can offer local advertisers. The idea and the centerpiece of the deal for Advance: the ability to offer local businesses additional marketing solutions, multiplying Advance’s sales.
- Advance Internet will use the capabilities of the Microsoft ad technologies — among them behavioral targeting (BT) and re-messaging (following would-be customers as they move about the web)
- The deal connects Advance and Microsoft directly on paid search products. Microsoft will deliver its text ads both through its paid search and contextual-reading ad products. Microsoft paid search ads will replace Google paid search on Advance sites.
The main difference: Advance Internet is maintaining its own ad platform, currently powered by 24/7 RealMedia, and integrating with Microsoft. Yahoo Newspaper Consortium members have fully adopted the Yahoo APT platform for their ad serving businesses, creating a closer, more exclusive relationship.
First, Microsoft is really coming back — to the newspaper world. After Sidewalk, after all kinds of attempted relationships, Microsoft — soon to be half of the Google/Microsoft search duopoly — is once again seeing the benefits of the newspaper company local connection. Advance Internet is the first major local news company reselling display ads into the Microsoft Media Network, Peter MacDonald, who is Microsoft’s PubCenter Director of Business Development, Advertiser and Publisher solutions, told me. Haven’t heard of the Microsoft Media Network? It was formed in February, rolled up from various Microsoft businesses, well-described here by ClickZ. Among the other big media companies named as collaborating on the new underlying PubCenter platform are IAC, Dow Jones Online, The New York Times Co., Time Inc., and Viacom.
With the Advance deal, it gets good local sales potential — those feet-on-the-street that are the envy of companies that are cubicle-bound and technology-centered. Recall that in the Microsoft/Yahoo deal, Microsoft’s Bing and paid search businesses will power not only Yahoo, but apparently all the newspapers sites in the consortium. That will mean that the majority of newspaper sites (with the big exceptions of Gannett, Tribune, the New York Times and the Washington Post, among others) will see critical parts of their business powered by Microsoft.
The solutions, here and in the Yahoo consortium: 1) sell more products, in addition to display; and 2) sell Other People’s Inventory and networks; in Advance’s case, Microsoft’s.
As I’ve noted, this new math is compelling — many smaller advertisers never could afford print. They can afford online, and that means the potential of hundreds and thousands of new customers in every metro marketplace.
According to Borrell Associates, roughly half of the $14 billion local online ad market is going to the pure plays — Google, Yahoo, Microsoft, AOL and smaller sites without legacy media businesses. Only a quarter of it is going to newspaper companies. Newspapers’ strength is in non-targeted display advertising; they’re minor players in the fastest-growing online ad segments of paid search and direct marketing.
Broadcasters see the new markets opening as well — all those small businesses that used to be “too small to sell”, businesses that have gotten a taste of self-service keyword advertising, but would like some help in putting together better, smarter campaigns. Both YP and broadcast companies are part of the Microsoft reseller program that Advance just joined, in fact. Conversely, Weinberger notes that with the new programs “we can go after broadcast dollars.”
So it’s a race, a “consultative” sales race. As I talk to newspaper publishers, broadcast execs, YP honchos, all will tell war stories of how hard it is to transform their legacy sales forces. How do you re-train “order-takers” for the new world order of selling targeting, networks and re-messaging? It’s a race of turtles to some degree.
The new world order of hyper-targeted, sold and serviced both by (self-serve) computers and flexible, innovative human salespeople is certainly not here yet. Whoever gets there first stands to build sizable new businesses. Yes, the buy-our-site-plus approach makes sense, and may offer initial advantage, but ultimately, whoever can bring results by best harnessing the diverse marketing environment wins.
What makes sense to me, conceptually at least, is that Advance is trying to remain at the solid center of its business. Here, it is leveraging Microsoft technology and network assets, but is not bound to its platform.
Via Ken Doctor of Content Bridges
News Corp. Newsrooms Worldwide To Share Content Through New Service NWS
News Corp. NWS is launching a global service to make its news content available to its entire network of TV, print and online news outlets across the world, Guardian UK reports.
The service, called NewsCore, will scan News Corp.’s story queues, satellite feeds, and Web sites, and make the content available in real-time to the company’s newsrooms worldwide. The company first announced the project in April.
Guardian: “When Sky News reports that Gordon Brown has called an election, everyone in the NWS family can run with it. When TG24 learns that Vesuvius has blown its top again, everyone in NewsCorp will have it. Immediately. And from a source we can trust – us,” said an internal briefing obtained by MediaGuardian.co.uk.
NewsCore will distribute text, video, audio and citizen journalism around the world in real time.No word on when the service will launch.The internal newswire, NewsCore, is also good way to consolidate resources and save costs.
Google CEO keen on M&A to extend cloud computing lead
Google Inc. is ready to seize any opportunity to grow its cloud computing business, Chief Executive Officer Eric Schmidt said, The Nikkei reported in its Wednesday morning edition.
Schmidt said that Google has “begun seriously looking at acquisitions again” in an interview Monday at the company’s headquarters in Mountain View, California. The Internet giant is training its sights mainly on venture-stage firms poised for growth.
A pioneer in cloud computing, Google is hurrying to further strengthen its capabilities. It decided last month to acquire On2 Technologies Inc., a manufacturer of video compression software. Similar deals may be on the way as Google scans the horizon for firms with key technologies or promising Web services.
Microsoft announced last month that it will form an alliance with Yahoo! Inc. Schmidt said Google will counter by focusing on innovation and seeking its own tie-ups with other firms on Web searching and advertising.
The Future of Print 
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