US newspaper groups are about to start posting their Q1 2002 financial results, offering an indication of how the sector has started the year from an advertising point of view and what the outlook for the coming months is likely to be.
A recent report in
Editor and Publisher found that revenue levels for February were coming in higher than forecasts had predicted (see
US Newspaper Groups Show Stronger Than Expected Ad Revenues).
Results ahead of forecasts Merrill Lynch had predicted a 7% year on year decline for February, but figures reported so far indicate a slip of just 4-5%. This may indicate the beginning of a recovery, but most groups are remaining very cautious and advertisers are still not forward-booking to any great degree.
For the Q1 period, Merrill Lynch is forecasting an average decline in ad revenue of 6-7%. Dow Jones, the Wall Street Journal publisher which reported figures yesterday, saw a decline of 14.6% during Q1 (see Dow Jones Figures Hit By Continued Poor Advertising, Outlook Pessimistic). This in large part due to the company’s heavy weighting toward technology and finance advertising, two sectors which have been particularly weak since the dotcom slump of early 2001.
Another US newspaper publisher, Scripps, recently reported flat advertising revenues in Q1, or down 2% without the extra Sunday that fell in the period. In March, revenues showed the first gain since June 2001, up 4.8%, although this could have been boosted by an early Easter and will be seen as a deficit in Q2.
The Scripps figures are ahead of expectations and again may point to the beginnings of a recovery, particularly for groups not so reliant on the technology and financial sector advertising revenue.
Is recovery sustained? Analysts are now keen to see whether the raft Q1 figures will show a continuation in April of the upward revenue trends being observed during February and March.
These slight improvements are being felt in television as well in press. According to an Ad Age survey of media buyers and sellers, the 2002-2003 broadcast network upfront market is expected to increase by 6% year on year. Cable is forecast to grow 5%, the syndication market 5% and the kids market to be flat.
An upward tilt Merrill Lynch suggests that these forecasts may be optimistic – “the annual posturing of media buyers and sellers” – but that there is an upward tilt in the market in favour of sellers.
However, an Easter-boosted March is likely to yield a weaker April. Nevertheless, the trend across all media in the US is certainly, if gently, upward.
