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NYT: Online Ad Rev Trends Remain The Same; No Meters On The Homepage

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Online ad revenue gains at the New York Times Co. (NYSE: NYT) are hovering around 18 percent, the same as in Q1, said CEO Janet Robinson, speaking earlier at the JP Morgan Global Technology, Media and Telecom Conference. National auto and banking were the main drivers for the NYTimes.com in Q1 and continue to be pumping revenue to the site. In particular, JP Morgan’s Chase Sapphire credit card has been the exclusive advertiser on the NYT’s iPad app. While Robinson and Martin Nisenholtz, the NYTCo’s SVP of digital operations, discussed the virtues of the iPad as an additional revenue stream during their presentation, they also gave a few small updates on next January’s introduction of the metered paywall on the site. For one thing, Nisenholtz said that news on the homepage would remain outside the paywall.

Asked about the pay model, Robinson said that the company recognizes the need for “multiple revenue sources.” She compared it to the print side of the NYT, which relies on both circulation and ad revenues. “It’s important to note that the New York Times has a large digital advertising base already and we have already been very successful with cost-per-click, particularly at the About Group, but we’ve also secured a great deal of display advertising.”

Perhaps with an eye toward the recent competition from the WSJ in New York and other local areas, Robinson spoke about the existing relationship with marketers that the paper had formed, which helped it transition to single print/digital ad sales team.

Following that lead-in, JP Morgan analyst Alexia Quadrani asked Robinson about past statements she had made about the WSJ’s deep ad discounts, which were meant to undermine the NYT’s relationships with major advertisers. Robinson had previously characterized the WSJ’s pricing as “irrational” and her view hasn’t changed. “They’re playing a volume game, we’re playing an engagement game,” Robinson said. “It has had no impact on us. We’re aggressive when it comes to selling custom packages, yes, absolutely. Are we making sure we have our marketing programs in place? Sure, but this is standard course of business.”

In terms of online advertising, Nisenholtz spoke about the value of the NYTimes.com’s homepage as an venue for sponsors, not CPM -based ad sales. “As the low-end, network side of the business has revolved around banner ads, the high end has migrated towards special programs,” he said. “Looking at CPMs, cost-per-click has been good, and rates, which principally take place on About, have steadily been rising since Q3. With respect to run-of-site inventory, which is not sold by networks, the CPMs on that business have firmed up. They’re stronger than they were last year, but they tend to be fairly low at the same time.”

Walking through the opportunities for revenues from e-readers, Nisenholtz pointed out the NYTCo has a relatively long history dealing with non-web digital content, going back five years to the Times Reader e-paper. “I think things really started to change with the Kindle, which has been very successful, but was created for books, not periodicals,” he said. “So it doesn’t have an advertising model. Nonetheless, we’ve created Kindle versions for the NYT and the Boston Globe and have done very well over the last two years.”

Nisenholtz didn’t offer any criticisms of what some on the publishing side feel is an imbalance split of the revenues, which has Amazon (NSDQ: AMZN) taking roughly 70 percent of every sale through the device. He said that the company merely wants to be platform agnostic, and is available on Barnes & Noble’s Nook as well as the Sony (NYSE: SNE) eReader. But the iPad is something a little different, he added, describing it as “very rich” in terms of having a web browser as well as the app store. Speaking of which, the NYT’s Editor’s Choice app has been downloaded over 300,000 times since the iPad launched over a month ago. That means roughly a third of 1.3 million people who has bought the device has the NYT app, he added.

Perhaps aware of the criticism that some have thrown at the slimmer news offerings on the Editor’s Choice app, Nisenholtz said that the company would release a full version of the paper in iPad app form at the same time the metered paywall goes up in January.