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APRIL AD REVENUE DECLINES HAMMER NEWSPAPER PUBLISHERS Classified dollars continue dramatic drop; retail declines cyclical?

Classified ad revenue declines continued to hammer publishers as the first of the April results reports came in last week. That's not to say that drops in national or retail didn't occur, but they continued to be not so dramatic.

By the numbers:

*Gannett Co. Inc.: Losses in classified ad revenue led the way at the McLean, Va.-based newspaper giant, with total ad revenue for Period Four, March 31-May 4, off 10.4 percent, to $410.9 million.

Classified revenue was down 15.8 percent, to $155-1/2 million, while national was off 8.2 percent, to $65.9 million, and retail was down 6.1 percent, to $189-1/2 million.

Classified real estate revenue declined 23.8 percent, employment revenue was down 20 percent and automotive revenue was 13.2 percent lower. The company said that classified results at its papers in the United States were weaker than those at its papers at its Newsquest division in the United Kingdom.

At the company's USA Today, ad revenue was down 6.4 percent on paid ad pages of 335, versus 381 last year. In the fourth period at USA Today, strength in the travel, financial, automotive, restaurants and advocacy categories was offset by softness in the entertainment, technology, retail and telecommunications categories.

*Journal Communications Inc.: Big revenue declines in classified at its flagship daily, the Milwaukee Journal Sentinel, and in "other ad revenue" at its group of community newspapers and shoppers, helped propel this multimedia company's newspaper ad revenue downward 6.2 percent, to $19.2 million, for the fourth period, when comparing 2007 to 2008.

Classified ad revenue at the daily was off 18.1 percent in the period, bringing combined total classified revenue down 16.8 percent, to $4.4 million. National ad revenue (a category only at the metro) was down 5.8 percent, to $597,000, while combined retail declined 3.6 percent, to $8.8 million. Direct marketing, a category only at the metro, was down 9.8 percent, to $222,000, while "other ad revenue," a category only at the community group, was down 66.7 percent, to $20,000.

*The McClatchy Co.: Classified advertising in Florida and California continued to pound this Sacramento-based publisher, with total combined print and on-line April ad revenue declining 14.8 percent, to $159.7 million, when compared to April 2007.

Total classified ad revenue dropped 27.6 percent in the month, to $52.9 million, while national was down 18.8 percent, to $13.9 million, and retail was off 2.8 percent, to $78.6 million. Direct marketing revenue declined 12.9 percent, to $14.1 million, while the ever-popular "other advertising" was off 26.6 percent, to $177,000.

Classified employment made the biggest drop, down 38.9 percent, to $16.2 million, while classified real estate was off 35.1 percent, to $14.1 million, and classified automotive dipped 17.8 percent, to $13.2 million. Classified "other" ad revenue was up seven percent, to $9.4 million.

Total print ad revenue was off 17.4 percent, to $142.2 million, while total on-line ad revenue was up 14.3 percent, to $17-1/2 million.

Full run-of-press linage for the company's dailies was off 16-1/2 percent, while pre-print distribution declined two percent.

*Media General Inc.: Another victim of the Floridian classified crisis, this Richmond, Va.-based multimedia company reported that total ad revenue for April dropped 16.6 percent when comparing 2007 to 2008, to $37.2 million.

Classified ad revenue led the declines, coming in 29 percent lower, to $13.4 million, when compared to last year. National dropped 20 percent, to $2.9 million, while retail was off 5-1/2 percent, to $20.3 million.

The company's Interactive Media division showed a 15-1/2-percent revenue increase for the month, to $3.8 million.

The company said Publishing division revenue declined in Florida by 27 percent for the month, while revenue in Virginia, North Carolina and Alabama decreased 9.9 percent, 7.6 percent and 2.1 percent, respectively. Revenue rose 3.7 percent in South Carolina, driven by ad money from a new weekly newspaper in the greater Florence/Myrtle Beach market.

For the company's three metro markets combined, employment revenue decreased 42 percent, real estate revenue was down 40 percent and automotive revenue declined 38 percent.

*The New York Times Co.: Its operations in New England and at its Regional Media Group continued to drag on this publishing company, with regional ad revenue in April off 16.4 percent when compared to the same month last year and New England ad revenue down 12 percent when compared to April 2007.

Total News Media Group ad revenue was off six percent, to just under $176 million, for the month, while ad revenue at its operations was up 14.2 percent, to $10.2 million.

Total classified ad revenue was down 23.3 percent, to just under $41 million, while the "other ad revenue" category was down 14.2 percent, to just under $6 million, and retail was off 7.8 percent, to $39.7 million. National ad revenue was up 6.7 percent, to $89.4 million.

Classified employment revenue was the biggest loser, down 34.2 percent when compared to April 2007, while classified automotive dropped 26.2 percent and classified real estate declined 18.9 percent and "other" classified ad revenue was off 8-1/2 percent.

There might be a case to make that the declines we're seeing in retail and national are certainly cyclical -- the overall recession is undoubtedly driving those drops (when they exist -- note the New York Times showed a national ad revenue increase). But would I begoing out on a limb to say that the downward numbers of classified are the new secular of the newspaper business? Do publishers need to begin to build business models that include only a fraction of classified revenue that was seen 10 or 20 years ago?
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Date:May 26, 2008
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