By: Seth Sutel, The Associated Press Newspaper publishers, entering 2008 with some of the worst economic conditions in years, said Wednesday they hope to bring even more readers -- and ad spending -- to their Web sites with expanded offerings of news, advertising and video.
The newspaper industry has been struggling as a dismal housing market weighs heavily on real estate and other types of print advertising. As Donald Graham, CEO of The Washington Post Co., put it: "2007 was not a good year for anybody in the newspaper business."
But Graham said his company was hopeful about expanding its audience online, particularly as the 2008 presidential election approaches. That, he said, should play to the Post's strengths in political reporting as well as at the company's online magazine, Slate.
At McClatchy Co., the third-largest newspaper publisher by circulation, CEO Gary Pruitt said the company's online advertising growth was "stunted" in 2007 due partly to one-off factors such as changes to the company's agreement with CareerBuilder, a recruitment advertising network co-owned by Gannett Co. and Tribune Co.
The executives were speaking at a conference sponsored by UBS.
Chris Hendricks, McClatchy's head of online operations, called the company's 0.8 percent growth in online ad revenues in the year-to-date period through October "disappointing," but said McClatchy was optimistic about converting more of its online traffic into ad dollars next year. In October, he noted, unique visitors to McClatchy Web sites jumped 23 percent over the same month a year ago, to 21 million.
Part of McClatchy's optimism stems from a deal with Yahoo Inc., which has enlisted hundreds of newspapers in a national consortium aimed at boosting traffic to news Web sites and enabling them to sell more ads by using Yahoo's technology to target very specific categories of users.
Hendricks gave the example of targeting people in the Sacramento, Calif. area -- where McClatchy owns The Sacramento Bee and also has its corporate headquarters -- who have visited a restaurant in the last 30 days.
However, many of those benefits may be a ways off. Hendricks said that Yahoo has been ironing out its ad-serving technology for newspapers and that McClatchy's newspapers would start to implement the technology in June through October of next year, with the benefits becoming most apparent in 2009.
Tom Russo, a McClatchy shareholder and fund manager at Gardner Russo & Gardner, called the Yahoo program, which McClatchy joined in April, a "promising venture," but he also hoped for a quicker rollout. "In a fast-moving world, it's slow," Russo said.
Some publishers have other businesses to fall back on, even as print circulation and advertising suffer because of economic sluggishness and the ongoing migration of readers and advertisers to the Internet.
At The Washington Post Co., revenues from the Kaplan education businesses will be a majority of revenues next year, Graham said, making it an "education and media company," versus a "media and education company." Besides its namesake newspaper, the company also owns Newsweek, a group of television stations and a small cable TV operator.
Gannett Co., the largest publisher in the country, also has a significant broadcasting business, which is "very well positioned" to capture political advertising spending in 2008 thanks to strong ratings for local news and a host of stations in markets with contested races, Gannett's broadcasting chief Dave Lougee said.
Sue Clark-Johnson, the chief of Gannett's newspaper division, said the company saw a strong correlation between regional slumps in housing and declines in advertising. Gannett's newspapers in Arizona, Nevada, California and Florida accounted for 28 percent of the company's newspaper revenues but accounted for 48 percent of the declines, she said.
Online, Gannett was far more optimistic, Clark-Johnson said, noting that 600 print journalists had been trained to make videos for newspaper Web sites. She said Gannett-owned newspaper Web sites were on track to post a 32 percent gain in page views this calendar year.
Gannett's flagship USA Today, meanwhile, is expected to report a decline of between 6 percent and 7 percent in revenues this year versus last year, more than half of which resulted from a sharp drop in automotive advertising.
Some declines had been expected, but the downturn was far worse than originally believed, Craig Moon, USA Today's publisher, said in an interview.
"You've got the Big Three (automakers) evaluating their whole business," Moon said.
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