Gannett's publishing segment -- the U.S. and U.K. newspapers, principally -- is showing more gains in an important area: digital revenue, according to the new second-quarter financial report to the U.S. Securities and Exchange Commission. This is at least the second consecutive report to show year-over-year growth.
That's potentially good news, since digital is the industry's future -- so long as this doesn't involve an accounting sleight-of-hand. By that, I pose the following question: If a newspaper sells a $1,000 advertising contract with Joe's Hardware Store that includes $200 in "free" online banner ads, how is that counted? Is it a $1,000 all-print contract, or is it booked as $800 in print and $200 in digital? More important, are the same digital advertising accounting standards used every quarter, and across all the newspapers?
Following are relevant sections of the four most recent 10-Q quarterly reports to the SEC. (I can't find any similar language in the 10-K report, which includes 2009's fourth-quarter results.) I've highlighted the key information in boldface. Note: the company's Digital Segment, referenced below, comprises the purely digital portfolio, including CareerBuilder, PointRoll, ShopLocal, Planet Discover, Schedule Star and Ripple6.
From the second-quarter 10-Q report, filed yesterday:
The Company’s publishing operations, including its U.S. Community Publishing Group, the USA TODAY Group and the Newsquest Group, generate advertising revenues from the operation of Web sites that are associated with their traditional print businesses. These revenues are reflected within the retail, national and classified categories presented and discussed above, and they are separate and distinct from revenue generated by businesses included in the Company’s Digital Segment. These online/digital advertising revenues increased 12% for the quarter and 9% for the year-to-date period. Online revenue at U.S. Community Publishing grew 14% for the quarter while at Newsquest, digital revenues increased 9%, in pounds.
From the first-quarter 10-Q:
The Company’s publishing operations, including its U.S. Community Publishing Group, the USA TODAY Group and the Newsquest Group, generate advertising revenues from the operation of Web sites that are associated with their traditional print businesses. These revenues are reflected within the retail, national and classified categories presented and discussed above, and they are separate and distinct from revenue generated by businesses included in the Company’s digital segment. These online/digital advertising revenues increased 5% for the quarter, due to strong results from the classified automotive, national and retail categories, offset slightly by a decline in online employment revenue. Excluding employment, online revenues in the U.S. Community Publishing Group were up 11%.
From 2009's third-quarter 10-Q:
The Company’s publishing operations, including its U.S. Community Publishing Group, the USA TODAY Group and the Newsquest Group, generate advertising revenues from the operation of Web sites that are associated with their traditional print businesses. These revenues are reflected within the retail, national and classified categories presented and discussed above, and they are separate and distinct from revenue generated by businesses included in the Company’s new digital segment. These online/digital advertising revenues declined 19% for the quarter and 22% for the year-to-date period, principally due to reduced employment advertising.
From 2009's second-quarter 10-Q:
The Company’s publishing operations, including its U.S. Community Publishing Group, the USA TODAY Group and the Newsquest Group, generate advertising revenues from the operation of Web sites that are associated with their traditional print businesses. These revenues are reflected within the retail, national and classified categories presented and discussed above, and they are separate and distinct from revenue generated by businesses included in the Company’s new digital segment. These online/digital advertising revenues declined 24% for the quarter and 23% for the year-to-date period, due principally to reduced employment advertising. Absent the impact of lower employment advertising, online advertising for U.S. community publishing declined 2% for the quarter and remained flat for the year-to-date period.
Saturday, July 31, 2010
2 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
Note: Only a member of this blog may post a comment.
Subscribe to:
Post Comments (Atom)
Clearly digital is the bright spot, and that points to the future for GCI's papers. But what I am curious about is how GCI is accounting for the costs of producing this revenue. Are they just transferring the payroll of sales people selling these ads to the regular paper, or somehow segregating them out.
ReplyDeleteeach site should have an online sales team. But the retail and inside sales staff cost are not being broken out. And if they are its only an estimate not actual time trying to sell online.
ReplyDelete