Increased Digital Is A Bright Spot in Latest Times' Earnings
It takes a relatively close read to discover, but The New York Times Co. reversed the trend of declining ad revenue in one area in the fourth quarter of 2009: digital advertising. According to its fourth quarter 2009 earnings, released on Wednesday, digital advertising increased 10.6 percent to $90.6 million across all of its online properties, which include nytimes.com, Boston.com and About.com. Online ad revenue for the News Media Group, which excludes About, was up 4.6 percent to $53.8 million.
Seriously though, even if all Internet revenue represents only 15 percent of the company's total's revnue--and About.com is still the Times Co.'s standout Web property in terms of traffic--this is marginally promising news. The uptick in revenue is welcome, but the uptick in traffic reverses a deeper, depressing trend in a depressing year for the company. Traffic to almost all NYT Co. Web properties has been going up significantly throughout the downturn, but digital ad revenue continued to decline substantially anyway, on a percentage basis at a much worse rate than digital advertising as a whole.
For the first half of 2009, U.S. Internet advertising declined by .7 percent; at the online properties of the Times' News Media Group, compared to a drop or 21.6 percent in the second quarter of 2009 , (and an eight percent drop in the first quarter), according to figures from the Interactive Advertising Bureau. Meanwhile, according to data from Nielsen Online, unique visitors to all NYT Co. properties surged by 16 percent just between June of last year and January, with Boston.com showing a 53 percent gain in traffic as its print counterpart, the Boston Globe, fought for its very existence. At certain points during the course of 2009, company brass must have asked themselves: "If we can't do better at gathering revenue out of growing online properties, how can we possibly succeed?"
Of course, this problem was experienced by many online media companies, but the sour economy should receive only part of the blame. For some time now, the long tail has been wagging the Internet dog. As technology has become better at monetizing online ad units -- even those on the lowliest blogs -- online advertisers have adopted a lowest common denominator mentality, buying up cheaper ad units across the Web at the expense, literally, of placing premium ads on premium content, like what the NYT Co. offers.
Just as the Internet ad revenue upswing is due to some optimism that the economy is getting better, there may be another reason for the revenue increase. As I've written about before, the NYT Co. properties, and other premium online content companies, have been running bigger, splashier ads, giving advertisers the opportunity to do something more dramatic than they can do if they only buy the smaller standardized units that account for most display advertising on the Web. The more dynamic ad units, backed by the Online Publishers Association, made their debut last summer, and, based on my daily visits to nytimes.com, seem to have gotten a lot of traction.
Maybe, just maybe, this is a sign that the long tail is losing some of its wag. While not everyone would applaud that, NYT Co. and its competitors undoubtedly will.
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