Traditional Publishers Release Rosy Online Unit Results
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Two major traditional media companies posted upbeat third quarter results for their interactive units, lending more credence to the notion that interactive advertising is on the rise.
The New York Times Co. (Quote, Chart)and The Tribune Co. (Quote), Chart)) both reported significantly higher online ad revenue than over the same period last year. Revenue increases for interactive were far larger than the gains in other operating units for both companies.
Revenues for New York Times Digital grew 19.7 percent in the third quarter to $21.8 million, up from $18.2 million for the same period a year ago, and operating profit more than doubled to $5.7 million from $2.8 million in 2002's 3rd quarter.
The company said the increase in its digital unit's performance was due to higher ad revenues resulting from increased volume.
"New York Times Digital achieved new records in both revenues and ad pages for the quarter," said CFO Leonard Forman. "The outlook remains bright, with NYTimes.com closing agreements with AOL and General Motors."
The company's flagship Web property, NYTimes.com, maintained its number one ranking among newspaper-owned Web sites, according to Forman
The Tribune Company reported interactive revenues of $25 million, up 24 percent over 2002's 3rd quarter. The company attributed the growth to strength in classified, banner and sponsorship advertising. That's a much higher rate of increase than occurred in Tribune's overall third quarter operating revenues, which climbed by 3.4 percent to $1.39 billion from $1.34 billion in the 2002 third quarter.
The results support the theory that the online ad market rebound is well underway. In June 2003, the Interactive Advertising Bureau and PricewaterhouseCoopers found evidence the lengthy decline in the sector finally came to an end last year.
That study found one key driver of the growth in online ad spend was robust demand for paid search marketing. The results from The New York Times and The Tribune suggest demand for banner, classified and sponsorship ads has also improved.
The companies' earnings results, which show interactive revenues soaring above company-wide performance, suggest interactive might lead an overall advertising rebound.
The upbeat results follow Internet bellwether Yahoo's recent solid performance. The company raised its full-year revenue and earnings estimates after posting a second quarter profit of $51 million, or $0.08 a share. The company more than doubled its earnings from the same period in 2002.
In response to a question about the implications of the telemarketing "Do Not Call" registry on the company's own marketing efforts, New York Times SVP of Newspaper Operations Janet Robinson said the company is compensating for a planned reduction in telephone sales by transferring its subscription marketing process to the Web and other media.
"We are well prepared for the 'do not call' list because we've been converting to other channels for some time," said Robinson. She said the Web has an increasingly important roll in the company's subscription sales.