Q1 Advertising Revenues Expected to Rise

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By: Jennifer Saba

Things are looking up on the advertising front, according to recent research released today by Goldman Sachs. Despite January’s sluggish start, the investment firm predicts that February and March will see gains in ad growth at 4% to 5%. The likely spurt in revenues is due to an improving economy and strength in help wanted ads.

Goldman Sachs estimates that, excluding the extra Sunday in February, “newspaper ad revenues advanced about 4%,” ahead of January’s 2.9% increase. Three ad categories — retail, national and classified — continue to improve. February had a gain of 8.2% in classified ad revenues. Counting February’s extra Sunday, help wanted revenues rose 10% compared with January’s 3%.

The firm is optimistic about help wanted improvement even though there is some contrasting data: “While the Conference Board help wanted index is still not showing meaningful [year over year] improvement, we note an increasing disconnect between this index and actual newspaper company revenue performance.” The Conference Board measures 51 markets and does not take into account the impact of online ads, the report said, which could explain for the discrepancy.

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