Digital advertising 2.0 has arrived, The New York Times finds
As the New York Times suffered sharp print losses like other newspaper companies in the second quarter, it experienced a "tipping point" in digital advertising as well.
President and CEO Mark Thompson said that in recent months "traditional display" like banners have accounted for less than half of digital ad revenue.
Audience and advertisers are moving quickly to smartphone mobile and with different kinds of campaigns. In the transition, the company recorded a 7 percent quarterly loss year-to-year in digital advertising revenue.
But Thompson said that he expects "double-digit growth" to resume in the second half of the year.
He and top ad executive Meredith Kopit Levien said that advertisers are opting for sponsored content and placements alongside novel storytelling formats like virtual reality. So varied presentation has become a priority for the news side.
Another trend is for bigger, long-term campaigns, strategic brand-building over time as opposed to what Kopit Levien described as typically "tactical" print placements over a period of a couple of weeks.
"These complex deals take longer to get in place," she said, explaining the growth hiccup.
Another effort in progress, she said, is to build better display modules for smartphone display and then make similar changes to the desktop version.
In other respects, the Times's second-quarter results continued recent trends.
Digital-only subscriptions increased by 51,000 and now stand at 1.24 million (The Times' crossword puzzle vertical added another 16,000).
With circulation and other revenue growth, the company held revenue losses to 3 percent. But its advertising revenue tanked. Total ad revenue was down 12 percent and print advertising down 14 percent year-to-year.
The Times is not nearly as reliant as most of the industry on the declining pre-printed insert category. But parts of its distinctive advertising base — luxury, entertainment and high-end retail — were off significantly.
Print circulation is weak as well, falling 6 percent daily and 4 percent Sunday compared to the same period in 2015. Single-copy sales are especially soft.
With some severance costs related to shutting down its Paris business operations, the company operated at a slight loss of $500,000 for the quarter on revenues of $372.6 million.
Thompson said that he expects costs to be up slightly the rest of the year because of investments in new digital products. But a strategic review of expenses is in progress, he said, and savings will come later.
The Times recently completed a buyout of 80 positions with severance costs hitting in the second half of the year.
With the business news mixed at best, Thompson (like Gannett CEO Bob Dickey Wednesday), led off a conference call presentation to analysts by boasting about editorial excellence. "We have a thesis...," he said, "that the demand for exceptional journalism...will only grow."
This has been a great year for news, Thompson said, and the Times has built its presentation repertoire so that it is now winning awards for video and virtual reality productions as well as Pulitzers and other print prizes.
Kopit Levien said that a big payoff for the effort in video advertising has not yet arrived, but she expects it to materialize in the near future.
New York Times Co. shares were down 2.1 percent in early afternoon trading.
Correction: An earlier version of this story said that all 80 buyouts were in the newsroom. Only about 50 of them were