New York Times Digital Ad Revenue Falls, but CEO Predicts Third-Quarter Rebound
The New York Times on Thursday said its digital ad revenue in the second quarter fell 6.8% from the quarter a year earlier, combining in part with a 14.1% plunge in print advertising for an overall ad-revenue drop of 11.7%.
Across the industry, legacy publishers like the Times are banking on gains in digital advertising to help make up for declines in the print advertising and circulation revenue that once gave newspapers enviously high margins.
Display ads on the home page and elsewhere on the Times website were singled out as a big reason for the digital advertising drop. On a call with analysts, Chief Revenue Officer Meredith Kopit Levien took a glass-half-full approach, pointing out that the company's digital advertising "growth areas" -- mobile, programmatic, branded content and video -- exceeded traditional display in the quarter.
Ms. Levien and CEO Mark Thompson said advertising deals are getting bigger, and more multifaceted, which also means that they take longer before they close and contribute to the bottom line.
"The character of deals and deal flow has changed pretty significantly," Ms. Levien said. "In general, more big deals has been the strategy." Some of the deals, she said, will show up on the books in the second half of the year.
The Times, Mr. Thompson said, is now doing more advertising deals in the "million-plus range."
Ms. Levien said the Times is seeing strong demand for mobile advertising. More broadly, she said, "We're seeing a rapid transition in the market for desire for all ads ... to be more seamlessly integrated into the surrounding experience."
Mobile made up 22% of the company's digital ad revenue for the quarter, and Mr. Thompson said it's "growing at rates that even Mr. Zuckerberg's little firm would recognize," a playful reference to Facebook and CEO Mark Zuckerberg.
Overall, the Times reported an operating profit of $9.1 million for the quarter, compared with $38.1 million a year earlier, on revenue of $372.6 million.
Consumer revenue is a vital slice of the Times' revenue picture, and on that front the company boasted a 67,000 net increase in paid digital subscriptions for the quarter, including both news products and the company's crossword product.
On the digital advertising front, Mr. Thompson said the company is seeing a turnaround in July, and he predicted double-digit growth in digital advertising for the third quarter.