Declines in advertising revenue worry DMGT
Online advertising revenue has propped up overall marketing figures for the Daily Mail & General Trust, which has experienced declines in print advertising revenue.
DMGT’s online ad revenue supplements declining print performance
Monday, March 28 2011 by Kate Billinghurst
Internet consultants are proving their value to the Daily Mail & General Trust (DMGT), with online advertising revenue supplementing poor performances across print titles.
The group’s Northcliffe Media arm saw advertising revenue decline by eight per cent in the five months to the end of February. Worsening performance was reflected in a drop of 12 per cent over the 11 weeks to March 20th.
Circulation also fell over the five months to February 2011 by three per cent, contributing to declines in revenue of eight per cent.
By comparison, total underlying advertising revenues at the Associated Newspapers arm increased by five per cent. Newspaper operations saw advertising revenues grow by four per cent, despite declines in circulation revenues.
However, digital advertising revenues, such as third party website promotion via banner ads, helped to offset declines across “more subdued and volatile” print advertising.
Overall, DMGT is confident that these print advertising and circulation wobbles will not stop operating profits from growing compared to 2010.
Increases to newsprint costs were problematic, but DMGT suggests that this did not prevent a solid performance across consumer news operations.
However, this has not prevented the group from making job cuts. The consumer news arm, A&N Media, saw 520 positions cut over the five-month period. Some 317 of these were at Northcliffe Media, where the sharpest declines in ad revenue were experienced.
In his February interim management statement, covering the first quarter of DMGT’s financial year, group chief executive Martin Morgan explained that trading had been in line with expectations.
“Overall our B2B operations are experiencing good momentum and consumer media continues to benefit from national advertising growth, though we have limited visibility,” he added. “Our focus will remain on investment to drive organic growth, while continuing to seek to improve operational efficiency and to reduce debt.”
Living Streams “Improving clients’ profitability through better use of the internet”.