News International’s stable of newspapers has begun to tighten its belt as fears over a slowdown in advertising revenue mount. According to reports in the Financial Times, executives at the Times, the Sunday Times, the Sun and the News of the World have set out a budgeting programme which includes a freeze on new hirings.
The group has seen a huge increase in the demand for print advertising in recent weeks but there are signs that this will slow down in the new year. In particular, the recent growth in advertising from technology and communications markets looks set for a reversal following a slump in the dotcom sector.
So far television companies have been hit the hardest by uncertainty in the new media sector. This week Carlton Communications reported a slowdown in ad revenue in the last quarter and Zenith Media predicted a global decline in the growth of adspend.
Now newspaper publishers are beginning to feel the effect. Shares in Financial Times publisher Pearson fell 2.4% today after its American rival Dow Jones issued a profit warning following a slowdown in advertising at its flagship publication, The Wall Street Journal. Advertising volume dropped 12% during November, with financial advertising the hardest hit, falling 16.2%. Analysts believe such a slump is likely to have a knock-on effect at the Financial Times.
