While print advertising declines are a given for most major newspaper publishers these days, the online side of the business has still tended to be positive for most. Not so at the Washington Post (NYSE: WPO), where display dollars fell 16 percent in Q2 and even slipped 4 percent during the first six months of 2011. The results for online classifieds were mixed so far, though the numbers were too small to make much of a difference in WaPo’s publishing fortunes either way.
Overall, the newspaper publishing division, which is really just the flagship paper, saw drop 6 percent to $162.8 million in Q2. Print ad dollars declined 12 percent to $66.6 million. The problems were largely due to less spending across the paper’s classified, zoned and general advertising. On top of that, for the first six months of 2011, WaPo’s daily and Sunday circulation fell 4.5 percent and 4.1 percent, respectively, compared to the same periods of the prior year.
Total revenues for WaPo’s online adjuncts, primarily the washingtonpost.com and Slate, decreased 13 percent to $23.4 million. Specifically, newspaper online revenues declined 3 percent to $49.1 million for the first six months of 2011. Online classified advertising revenue on washingtonpost.com slipped 2 percent in Q2, but was up 2 percent for the first six months of 2011.
Since WaPo doesn’t do earnings call, it’s hard to get a sense of what has been dragging online down badly. Looking at other newspapers’ experience, one possible culprit is tying print and online ad sales together. That’s obviously not an issue for the online-only Slate, which in March said that its ad revenues were up 33 percent, but print upsells probably what’s plaguing the flagship paper. In general, print upsells tend to dilute ad spending, because it just means that advertisers divide their marketing dollars between the traditional and the digital offerings, instead of increasing spending for both.
Secondly, WaPo does not have a huge base of advertising to mine, as Washington, DC hyperlocal TBD realized earlier this year. With all that in mind, the company needs to figure out a way to spread its online advertising appeal more widely, something that could be tough as the economic recovery appears to weaken further.