As the table shows, USAT's total paid ad pages fell 4% during the latest quarter, to 580, from 602 in last year's second quarter. That's a reversal of the recent trend line, starting a year ago, which was moving in an increasingly positive direction.
The table doesn't show a more important figure: dollar revenue. Indeed, more pages can be misleading; they may not reflect discounting in ad rates, which leads to lower revenue. For example, first-quarter paid pages rose 3% from 2009, Gannett told investors in its initial earnings release April 16.
But a more detailed 10-Q report, filed May 4 with the U.S. Securities and Exchange Commission, revealed that revenue had actually declined 11% during the period, despite the rise in page counts.
USA Today's second-quarter ad revenue data ought to appear in the next 10-Q, which will be filed with the SEC in the weeks ahead. Stay tuned.
Does my analysis miss anything? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.
Good reporting job, Jim. As USAT goes, so goes the rest of Gannett. I will be interested to see what this so-called reorganization involves. To this point, I have not been impressed with recent editors or publishers of the nation's newspaper.
ReplyDeleteI understand the glory days are gone, but this new crew hasn't done a thing other than hasten the paper's collapse and drive away some talented, honorable people. A casual reader can easily tell that the paper isn't what it once was.
This is a paper that operates from fear now, from the lowest managers to the highest executives. It wasn't always like that. As you know, USAT was once pretty brash, and customers and employees alike responded well to that style. Now the paper is run by yes-men (and women), con artists and phonies. They look busy but do virtual nothing.
Whatever pride is left in the print product comes from individuals with decent work ethics. But overall, the only reorganization that USAT needs is to get rid of the small-time thinkers in the corner offices. Bring in some experienced pros with guts and a sense of how to produce bold journalism - real leaders, hard-nosed editors who mentor watchdog reporters, copy desks and designers - to replace managers holding on for dear life, who pretend they are grasping the digital world when, in fact, they barely know how to operate the printer.
Except USAT is bucking advertising trends across much if Gannett, where they showed more recovery in Q2. I'm flabbergasted by what's going on at USAT. A recent NYT I bought was nearly twice USAT's size -- and that was the national edition, smaller than the metro.
ReplyDeleteJim. What your are missing is that the paid ad pages are now a greater percentage of remnant ads sold in bulk. So, two years ago, we had 25% remnant "paid ads". Now we have over 40% remnant paid ads.
ReplyDeleteThe problem is getting worse. The mix of "real" paid ads vs. remnant/bulk paid ads is declining and low priced ads are becoming a majority.
But why is this happening? Why can't USAT sell more real, full-priced ads?
ReplyDeleteAlso, can you point to a recent example of a remnant, so we can better understand this type of ad?
Hunke did give a timetable of sorts, twice: He said six to eight weeks, by the end of summer, if not before. What he didn't give was any idea how exactly USA Today would then be a smaller company.
ReplyDeleteThanks, 6:48 am: That's the first time I've seen a timetable posted here.
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteFollowing is an edited version of a comment posted by Anonymous@7:01 a.m.:
ReplyDeleteIt is hard to determine a bulk/remanat ad, but Pella Windows is a good example of an advertisement that looks like a real paid ad, but was bought through a "reseller". The poster "USAT Analyst" is absolutely correct. There gas Bern an enormous increase in the number of low priced paid ads then the ones that out own sales team is responsible for selling directly.
You're welcome for the timetable, but out of 1,500 people working at USAT, not one is keeping you apprised of common knowledge?
ReplyDeleteThat's too bad, because unless someone in the know compassionately steps forward and signals exactly what kind of train is barreling down the tracks at us, I guess we'll all be knocked off our feet at the same time come the end of August.
The gloom over the newsrooms is palpable.
Some of what I've been told has sounded too speculative to post without more details.
ReplyDeleteJim:
ReplyDeleteThe credit still must go to the USA TODAY rate card folks. Despite the huge drops in circulation, the newspaper has been able to hang on to much of its average rate based on the numbers that you have provided.
My calculations suggest an actual INCREASE in average rate per page since the end of 2007. Of course, we don't have the revenue change yet for Q2. If it was minus 6% year-over-year, the average rate per page is up 3% since Q4 2007. Total revenue would be down 43% over the same period. Page counts are down 45%.
If the revenue change is down 11% YoY as it was in Q1, the average rate per page would be down 13% since Q1 2008 and revenue would be nearly half what it was in Q4 2007.
These figures assume a baseline ad rate per page in 2007, and do not account for other factors such as actual rate changes.
11:15 am: Those are excellent points, and a terrific analysis of the rate card, too.
ReplyDeleteNext time, post the ad pages and the revs in the same graph. Makes it easier to see the mess we're in.
ReplyDeleteMy guess is that revs will be down 14.2 percent in the Q for usat.
1:34 a.m.: That's a good idea; I've now updated the graph to show a column with ad revenue changes.
ReplyDeleteBTW, your figure -- 14.2% -- is intriguingly specific.