NYTCo Pins Revenue Decline On ‘Volatile’ Ad Market; About Stumbles

The crucial holiday season saw advertisers pullback from the NYTCo (NYSE: NYT) in Q4, as the company pointed to a “volatile advertising market” for causing revenues to dip during the period. Interestingly, as the world waits for the announcement of its metered paywall plan, the NYTCo noted that ad revenues from digital have become a much more significant part of its mix and made up 26 percent of the company’s total ad dollars in Q4.

Specifically, the company’s total ad revenues slipped 3.1 percent, as circ dollars declined 3.6 percent. “Other” revenues were up 3.1 percent.

Digital remained a particular bright side in general. The increase in digital advertising revenues, which rose 11.1 percent to $113.2 million, were, as usual, partially offset by a 7.2 percent drop in print ad dollars.

For the full year, the NYTCo’s digital revenues grew 14.8 percent to $387.3 million. Digital ad dollars were up 15.9 percent to $341.4 million. In total, digital businesses accounted for 16.2 percent of the NYTCo’s revenues for 2010 versus 13.8 percent for 2009.

Surprisingly, the About Group, which had gathered strength during much of 2010 after falling victim to the wider ad market declines of ’09, saw revenues slip 3 percent to $35.2 million from $36.3 million, the result of lower cost-per-click and display advertising. The decrease in cost-per-click advertising was a result of lower page views and click-through rates. The unit also experienced a 10 percent drop in profits as expenses ticked up about 4 percent.

Digital advertising revenues at the News Media Group, which houses the NYTimes.com, rose 18.3 percent to $212.2 million. In contrast to About’s stumbles, national display ad dollars flowed in to the newspaper sites.

Total News Media Group revenues fell 2.9 percent to $626.5 million as ad sales dropped 3 percent, and circ revenues declined 3.6 percent, and other revenues increased 2.6 percent.

With revenues performing so well at the newspaper sites, there is a lot of pressure on the NYTCo to show that the coming metered paywall won’t reduce those gains. Executives have already said that the paywall is aimed at the 15 percent of “heavy users” and is designed to preserve its high traffic levels.

In terms of its outlook, the NYTCo said the volatility in the ad space has continued for past two months. In part, the severe winter weather is being blamed for the uneven spending by marketers.

Still, the company said that January’s print advertising started out soft, but appeared to gain momentum, but decreases are nevertheless expected. Digital advertising has been trending upward in the mid-single digits, even though the About Group remained weak.