The new disclosure, coupled with USAT's recent bad news on circulation, underscores the ongoing challenges that lay ahead for Publisher Dave Hunke, who just entered his second year as the paper's chief executive. What's more, the filing came the same day The Wall Street Journal reported a 25% pop in ad revenue for the same three-month period. Competition between the two national dailies has recently grown more fierce.
USA Today is Gannett's largest daily by circulation, and its most visible brand. As such, it is the only newspaper for which Gannett breaks out separate financial results, although with limited detail. Overall, GCI publishes 100 dailies in the U.S., Guam and the United Kingdom.Today's filing, called a 10-Q report, only reveals the rate of change in advertising revenue; it doesn't give dollar amounts. The 11% decline is the smallest since the third quarter of 2008, company documents show. (See table, below.) Still, it is surprising and unwelcome news because Gannett had said in its last report that "fourth quarter comparisons were the best of the year and in December, USA Today ad revenues were nearly even with 2008."
The new 10-Q with the U.S. Securities and Exchange Commission shows that momentum didn't last.
Big advertising discounts?
Until now, Gannett had only provided first quarter page comparisons, in its general earnings release on April 16. Paid advertising pages totaled 544 vs. 527 a year before, it said at the time. Higher page counts amid falling revenue points to significant discounting. Such discounting would reflect USA Today's declining circulation; only last week, the paper said its circulation fell nearly 14% as of March 31 from a year ago.
The first quarter revenue decline was steeper than the 8% drop in Gannett's overall newspaper ad revenue for the period. As with the companywide figures, the continuing USAT decline is all the more worrisome because comparisons are against the first quarter in 2009, when the economy was in the grips of the worst recession in decades.USA Today's latest results included advertising sales for its website. Overall ad demand "continues to be impacted by the soft travel and lodging markets,'' the 10-Q report says. "Several categories at USA Today improved during the quarter including automotive, technology and retail. These revenue gains, however, were more than offset by weakness in the travel, entertainment, financial, telecommunications and pharmaceutical categories."
The Wall Street Journal's 25% jump in ad revenue came in parent News Corp.'s quarterly earnings report this afternoon. Responding to the WSJ's growing threat, USAT recently targeted a trade campaign at the News Corp. flagship, in hopes of ginning up more ad sales.
The following chart shows quarterly advertising trend at USAT; Gannett didn't disclose a rate change for the fourth quarter:
Earlier: Documents reveal USAT's truly steep ad decline[Image: today's paper, Newseum]
The truth is coming out. USAT is on the ropes. It has clearly lost its zip, both in coverage and getting ads.
ReplyDeleteTotally agree. Major trouble here.
ReplyDeleteUsing some back of the napkin math, you can see that after using a baseline established in 2008, average rate per page dropped by almost 11 percent in Q1 2010 vs. Q1 2008. Amazingly, USA TODAY's price per page actually jumped in the first half of 2009 using the 2008 baseline. Prices per page were up 4% in Q1, 2% in Q2 and then down 9% in Q3.
ReplyDeleteOf course the major problem with low page counts is that incrementally, much of the cost is already built into the product.
On the revenue side, again, using the baseline from Q1 2008, revenues would be down 41% at USA TODAY based on the page counts and average rate estimates for Q1 2010. All assumptions do not include any page rate changes, and more broadly show the breadth of the decline.
HUNKE NEEDS TO GO!!!!
ReplyDeleteGRACIA IS ALL OVER HIS ASS. SUSAN LAVINGTON THINKS THAT GANNETT IS A "SHITTY" COMPANY RUN BY A MARTYR.
ALSO, THE NEW HEAD OF SALES IS LOOKING TO LEAVE ALREADY.
I work at USA Today and I truly like all the people that work with me, but I really believe that we are lost. I do like the management team and have worked with them for over a decade. Unfortunately we are done. I am quitting next week.
ReplyDeleteI can only imagine what crap Hunke is going to feed Ms. Martore and Mr. Dubow to wiggle out of this sticky situation. He already used the Starbuck's hoax. The iPad is a true disaster, but a good distraction.
ReplyDeleteHunke is a master at the art of bullshit, but I think Ms. Martore will pick up on it if she is smart enough to challenge USA Today's business.
The sad truth here is that their ad sales in print rapidly declining even after the practically give away their digital advertisements !!! Most advertiser in print are given free online ads of they buy print. This is an effort for the USA Today sales team to keep print clients.
ReplyDeleteLori Erdos, Tony Hill and Jeff Webber (btw, can anyone tell me what that guy does) have all been told to give away online ads to save the print client.
Look at today's USAT front page to see how weak this paper has become. The "This plot was serious" banner doesn't work. You think anyone in New York's Time Square doesn't believe this was a serious plot? It is not in dispute. I would have gone with the 53-hour manhunt angle --from fizzle to success. What ever happened to the creative people at USAT?
ReplyDeleteThe anti-USAT force is strong in this thread.
ReplyDelete10:38 PM, you are a tool. Are you the same dolt who posted similar crap a couple weeks ago? I guess you must have surveillance devices planted all over the USAT tower, huh? That's the only way you could have information that those of us who work with these people every day have never heard mentioned.
Gracia all over Dave's backside? Susan dissing corporate leadership? Lee looking to get out? Damn, that's news to me and I've spoken to each of them several times within the last 10 days.
My guess is that you live in a state with "medical marijuana" laws, for which your doctor has written a prescription to help control your idiocy. Assuming that's the case, I suggest that you double up on the dosage. Your inner fool is still in control.
I don't know the 10:38 pm poster. But one USAT insider accurately wrote the following, the day before the ABC figures were published:
ReplyDelete"USA Today marketing head Susan Lavington will announce tomorrow USA Today takes another tumble with 13% decline in circulation. She announced to staff last week. She is changing her uneffective and unnoticed advertising campaign called "what America wants" produced by the wife of the former advertising vice president Bret Wilson since it is foolish to recite that any more (almost as foolish as her also uneffectives and unnoticed advertising campaign "we're all in this together," which cost more than one million to produce by Arnold Marketing). She is pulling all advertising promoting the newspaper campaign and only advertising online and USAToday.com."