Trinity Mirror’s Digital Crash Continues, Despite Ad Lift Hope

If Trinity Mirror (LSE: TNI) was hoping its online revenue growth would help offset the crippling declines in its newspaper businesses, it’s sadly mistaken. In an interim management statement (pdf) covering the year to October 25, the company reveals there’s no end to its digital revenue slide and online ads were down 19 percent year on year. And things are getting worse: in the 17 weeks to October 25, digital sales are down 22 percent on the year-ago figure.

Overall, Trinity’s revenue fell 15 percent in the year to date, prompted by a debilitating 25 percent decline in ad revenue in the year so far. But, just as Johnston Press reported its negative growth had slowed this week, things are getting better overall for the Daily Mirror publisher: for the second half so far, total ad revenue fell by 12 percent, which is five percent better than in Trinity’s H109.

Could this be sign that the declines of publishers’ annus horribilis won’t be repeated in 2010? Trinity thinks it could: “Whilst the trading environment will continue to be challenging over the remainder of the year and into 2010, we anticipate that the rate of decline in revenues will continue to improve.”

Digital Why are online ads down? Because of the “cyclical impact on the core recruitment and property revenues”, says Trinity, so presumably the digital decline is temporary as companies start hiring and families start selling houses again. Trinity stresses that without property and recruitment, digital ads actually rose 26 percent in the year to date. But there’s no hiding the disappointment of Trinity’s digital growth: the company made £43.6 million online in 2008, a growth rate of 27 percent, and seems like a long time ago now.

Nationals: For the year to date national newspaper ad revenue fell 11 percent, but that improves to a six percent fall in Trinity’s H209 to date. Mirror Group Newspapers this year launched two standalone niche sites, and, and they contributed to a group-wide monthly unique user figure of 17 million, a 40 percent rise year on year.

Regionals: The downturn may be eventually ending, but it’s still carnage out there for the regional press. Trinity’s regionals revenue fell 32 percent in the year to date, although in the second half to date the fall is 27 percent, signaling some hope for the sector. Recruitment ads are down 48 percent in H209 so far and property is down 34 percent, so no one’s out of the woods yet. Trinity has shut 26 regional papers this year and it’s on course to save £65 million in this financial year. It will, however, have to pay £20 million in restructuring costs to pay off staff and contractors.

Trinity may have turned a corner, but these are small mercies: as WPP CEO Sir Martin Sorrell put it recently, the upturn in the media economy may be coming but it’s dangerous to think that flat or slightly down is the new up; Trinity may be pleased with a five percent lift in its total revenue, but it still has a long way to go to return to the optimistic days of two years ago when its share price was upwards of £5 and all revenues were going in the right direction.