Local media operators are struggling to make meaningful overall gains from slow digital growth as the fragile UK economy and threats from alternative channels prompt their classified advertisers to pull back on spending.
Job ads not trickling up to digital
Johnston Press, which publishes 259 local newspapers and 221 websites, on Tuesday said revenue for the 18 weeks to November 3 was down by 11.4 percent compared with last year, in a market that is becoming worse.
To blame? A 16.8 percent hit on display ad sales that is “principally a result of weakness in national advertising revenues over the summer” and a 19.1 percent chunk taken out of classified ad sales, also “primarily due to the economic environment“, according to the publisher.
That environment means fewer companies are hiring new staff, so job vacancy ads are drying up. Johnston’s digital revenue — for instance, including web classifieds — is 2.9 percent up from last year, but digital remains hampered, moving Johnston to restructure its sales approach…
“The overall digital growth has been impacted by the reduced digital up-sell from a lower level of print employment advertising,” the company says. “This is being addressed by an increased focus on standalone digital employment advertising and a move to a ‘digital first’ approach.”
Recruitment slump wiping out gains
The large UK news publisher Trinity Mirror faces similar difficulty. Last week, it reported “a 17 percent decline in the more cyclical classified advertising categories — in particular, recruitment”.
That wiped out a 13 percent jump in online display ads and a doubling in digital marketing services as provided by the likes of Communicator and Trinity Mirror’s sports web design agency Rippleffect. Clearly, the local jobs market in this economy is not helping Trinity Mirror, which has dozens of specialist classified sites.
Reporting results for the 17 weeks to October 28, the Canary Wharf-based outfit said digital revenues fell by one percent from the previous year.
Yellow Pages seek alternative format
Recently-renamed Yell.com and Yellowbook publisher Hibu is finding similar challenges, as its classified advertiser base either pulls back spending or goes elsewhere.
The outfit lost 15 percent of its latest half-year revenue compared with last year because 12 percent of its Yellow Pages and three percent of even its digital directories advertisers fled.
But the range of digital and other re-growth initiatives Hibu has in place — all while under the pressure of acknowledging its shares will have “little to no value” — looks increasingly compelling…
Revenue from classical digital directories like Yell.com shrank by 15 percent because “customers are reducing their spend due to the highly competitive nature of the market”, Hibu said. But money from its digital marketing services boomed by 38 percent, as Hibu began introducing its newly-acquired build-your-own-website service Moonfruit to its customers.
Once again, however, this marketing growth did not make up for the decline in online classified sales, leaving Hibu’s total digital revenue down by 0.9 percent from last year.
Other initiatives include presenting advertising as content. Hibu recently piloted local community newsletters in the US, now publishes them in 300 communities and is expanding the reach to many more communities currently served by its old-fashioned printed listings directories.
Instead of placing small ads, Hibu asks advertisers to submit stories and photos to its newsletters alongside the traditional classifieds. The new line is already bringing Hibu more than £500,000 per month, the company says. If that suggests success, it is not hard to imagine this idea replacing old directories in those markets.