Advertisers Abandon The New York Times, Further Threatening Jobs There

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The New York Times’ revenues sank 13.9 percent last month. Ad revenue fell 20.9 percent. Despite a traffic increase to its web sites, ad revenue from the web declined 3.8 percent. At sister company New England Media Group (which houses the Boston Globe et al), ad revenue tumbled 23.3 percent.

The sobering news that even the best news brand on the planet cannot yet make a decent business out of the internet has led some to suggest that NYT may be the canary in the coal mine for web advertising — a leading indicator that spending declines will indeed come to the web, despite predictions (BNET readers are already familiar with the theory that the web and traditional ad economies have essentially uncoupled from each other in the last few months).

In terms of the ad business, the numbers seem to suggest that the recession is so bad that marketers no longer have the cash to reach NYT’s massive audience, 173 million views a month, plus its paper circ.

In response, the Times has frozen wages for non-union staff and attempted to do a real estate deal to pull equity out of its massively expensive Manhattan skyscraper. Earlier this year, the Times laid off 100 of its 1300 newsroom staff.

Check out NYT’s Q3 earnings statements: salary expenses (which are a significant portion of selling, general and administrative expenses) are just under half of revenues. Production costs (i.e. printing papers) are the other half. The company was only profitable because it sold its broadcasting group.

This suggests that if the Times wants to stay profitable it ought to consider laying off hundreds more of its staff. At the same time, it needs to figure out how to print less and make a greater margin on what remains.

Tags: Revenue, Job, Web, Advertisement, New York Times Co., Advertiser, Jim Edwards

Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.

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AdopsQueen

12/26/08 | Report as spam

RE: Advertisers Abandon The New York Times, Further Threatening Jobs There

As a graphic designer, the biggest struggle I face in maximizing clients' web advertising results is that "print mentality" (putting as much copy as possible to get the most bang for the buck) is all too persistent. Too many web advertisers fail to recognize or acknowledge that they have literally two seconds to get people's attention and every single thing in a web ad MUST MAKE PEOPLE WANT TO CLICK. Web ad designers and account executives constantly struggle to educate web advertisers on the concept of a "call to action," i.e., giving people a reason to click on the ad. Unlike print ads, web ad results are measurable through the click-through rate. Too many web advertisers insist on print mentality designs and then don't renew their web advertising contracts when their click-through rate (not surprisingly) disappoints.

Including phone numbers, URLs and web addresses makes total sense in print ads but in a web ad, they are not key selling points that make people want to click. Those who are interested in the product will click on the ad to get contact information. Many advertisers can't get their heads around this, and sales reps buckle and agree to the web ad with the ill-advised design in order to get the sale.

Conversely, some clients submit seemingly cutting-edge ads with "wow" factor in the design sense but these are often not kept simple enough to immediately give people a reason to click. A cool animation alone won't do the trick.

When designed properly and appropriately targeted, web advertising is highly effective. What the industry needs to maximize profits are account executives and graphic designers with web advertising knowledge and expertise who are willing to make an effort to educate clients on best practices...not those who think it sufficient to simply repurpose a print ad for the web or to put on an animation or video show without getting to the point in two seconds.