Despite Overall Dip, Time Inc. Sees Growth in Digital Ad Revenue
Time Inc. executives saw the bright side of a 2% decline in revenue for the fourth quarter of 2015, with Exec VP-CFO Jeff Bairstow calling it "the slowest rate of decline all year."
Mr. Bairstow, and Time Inc. CEO Joe Ripp, on an earnings call Thursday morning, expressed confidence that the company's digital advertising revenue is healthy and growing.
A 17% year-over-year increase in digital advertising revenue for the quarter was attributed to the strength of the company's video and programmatic offerings. For all of 2015, Time Inc. saw an 11% increase in digital advertising revenue.
Total ad revenue, however, declined 7%.
Also on Thursday, Time Inc. announced the purchase of a majority stake in Viant Technology, a cross-platform advertising targeting company that is projected to add $100 million in digital advertising revenue to Time Inc.'s coffers in 2016.
"It really takes our data capabilities to a whole new level, way in excess of anything Time Inc. has had before," Mr. Ripp told analysts. (The price of the acquisition was not disclosed.)
On the acquisition front, Mr. Ripp said that Time Inc. has been very disciplined and careful. "We've not chased the shiny objects," he said.
Time Inc., Mr. Ripp said, is exploring the possibility of creating an over-the-top, ad supported network for two of its brands, People and Entertainment Weekly.
The company's Print And Other Advertising Revenues category saw a 7% decline for the fourth quarter, and a 10% decline for 2015. But, when describing the company's print ad revenue outlook, Mr. Ripp said: "So far, so good." (Mr. Bairstow said that Time Inc. has outperformed the industry in this regard.)
Mr. Ripp pitched the importance of reorganizing Time Inc.'s sales structure to create three separate teams focused on the automotive, pharmaceuticals and technology and telecommunications advertising categories. The leaders of these teams were announced by the company Monday.
"We are confident that this new structure will deliver even better results for customers and increase our share in these categories," Mr. Ripp said.
Generally speaking, Mr. Ripp said, "advertising has become a very cluttered marketplace." Time Inc.'s marketers, he said, "are breaking through that."
Looking forward, Time Inc. has projected revenue growth of between 1% and 5% for 2016, buoyed by "another strong year of digital advertising growth."
Mr. Ripp, of course, is bullish on the company's outlook, and suggested that there's a bargain to be hard.
"Our Time Inc. stock is pretty cheap right now," he said.