Merrill Lynch: Only New Products, Online Saved Q1 Ad Revenues

By: Jennifer Saba New products like Hispanic- and youth-oriented papers along with digital properties made up a large portion of newspaper advertising revenue for Q1, according to a report released today by Merrill Lynch.

Reported newspaper ad revenues rose 3% compared with Merrill's forecast of 3.3% for the quarter. "Print newspaper ad revenues grew an estimated 1.5%, which likely has hefty contribution from new products such as Hispanic and/or youth targeted publications, new total market coverage products, and weekly papers," the report said, adding that ad revenue from Web sites jumped 40% and "saved the quarter."

As for March's tepid results -- Merrill estimated newspaper ad revenues increased 2% -- many companies blamed an early Easter. The March holiday hurt classified revenue but helped retail. National was mixed for the month.

Merrill analyst Lauren Rich Fine also noted the shift from traditional advertising vehicles (like newspapers) to online, especially given Yahoo and Google's strong Q1 results. The two companies' net ad revenue was up 47% and 109%, respectively. As further evidence, the report mentions that during a recent digital marketing conference a "top auto company said they are now allocating 25% of their budget to online media."

The firm lowered its newspaper ad revenue growth forecast for 2005 from 4% to 3.5%.


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