Blog Post

Earnings: Online Ads Slowing At DMGT, Too; Nice While It Lasted

Well, it was nice while it lasted – the phenomenal online advertising growth of the last couple of years, that is. In the same week PwC and Enders cut their forecasts for that growth, Daily Mail (LSE: DMGT) & General Trust, too, today warned advertisers are putting the breaks on the web.

Reporting for the 11 months to August 31, its Northcliffe regional publisher said: “Digital revenues have grown strongly, although the pace has slowed.” Still, online income there is 46 percent higher than last year.

In the Associated Northcliffe Digital (AND) online unit that spans both Northcliffe and the Associated Newspapers division, income was up 11 percent. That’s a far cry from sentiments in recent earlier periods. AND online revenue for Q407 was 90 percent up year-on-year, for example. Will we now come to regard the last couple of years as the go-go boom days of the online ad bubble?

Newspapers have already been getting used to falling print income. That trend has accelerated in the last three months, meaning Associated will make a smaller profit this year, though it’s worse regionally, where Northcliffe income is down five percent and advertising down nine percent. But many in online have been confidently predicting web ads to outstrip those in traditional media for a sustained period – that may yet be the case, but all the indicators say online is actually slowing along with print and broadcast.

DMGT’s saving grace, again, is its DMG Information B2B unit, sheltered from the advertising climate, where income rose eight percent. Full earnings come November 20.