McClatchy: Ad Declines Are Slowing; Online Ads Grow Slightly

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Credit: Sac Chef, Brian Bentzen

In a preview of next month’s Q4 earnings report, The McClatchy Company (NYSE: MNI) said that it has been able to reduce the advertising declines of the past few years, while growing the portion the online contributes steadily, if slowly. The numbers were a little behind the industry as a whole, though there was one tiny positive surprise: classified ads have been improving, with help wanteds actually rising 2.1 percent for the past seven months — not that those numbers could have gotten much lower. (And as Newsosaur’s Alan D. Mutter pointed out to me in an e-mail, McClatchy’s gain in recruitment dollars is actually less than half of the total newspaper industry’s aggregate 5 percent rise in job ads.)

While the publisher of The Sacramento Bee didn’t break out digital revenues, Gary Pruitt, McClatchy’s chairman and CEO, said in a statement that online dollars now make up 18.2 percent — last year, digital comprised 15.8 percent of sales; the year before it was 10.8 percent. In Q409, online revenues rose 14.9 percent as the industry began climbing out of the advertising recession.

Given Year-to-date advertising revenues through November 2010 were down 8 percent, as ads fell 6.4 percent in Q3. Total revenues for October and November 2010 combined were down 5.1 percent. In comparison, yesterday, the NYTCo (NYSE: NYT) said print would slip 4 percent in Q4, while online ads would be up 10 percent.Release

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Vin Crosbie

I love the PR spin newspaper companies annually gives to digital growth percentages! Do the math:

According to McClatchy’s SEC 10-K filings, its digital revenues of $164M in ’07 were 8.6% of the company’s $1.9B in overall ad revenues that year. Yet in ’09 its digital revenues of $183M were 16% of its $1.14B in overall ad revenues. What primarily made the percentage almost double wasn’t digital growth but plummeting print revenues. Had print not dropped, digital in ’09 would have been only 9.6%, not 16%. If online revenues today comprise 18.2% of total, I wonder how much of the latest increase is simply due to print’s decrease?

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