When USAToday Announced Its Annual 6% Advertising Rate Increase For 2007 ftm Cried Out That Newspapers Needed To Think Again About Such “Business As Usual” Antics Given Falling Circulations, And The Q1 Results, Including a 7.9% Revenue Drop at USA Today, Proves The Point

And if all of that isn’t bad enough for the newspaper purist, Google goes and announces a 69% Q1 profit increase working out at $3.18 a share and if it wasn’t for all that money it gave away in stock compensation schemes the profit would have been $3.68 per share, around 10% more than analysts had forecast.

But as Google tells the world that new media business couldn’t be rosier, and advertising revenue is just fantastic, what are the newspaper publishers saying? Here, from quarterly reports by public media companies, is a digest:

McClatchy doesn’t report until April 24, but its February ad revenue was down 5.1% causing analysts to lower their already low forecasts for the quarter.

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What Do McClatchy, New York Times Company and Journal-Register Have In Common? They Have All Taken Huge Write-Downs On Some Of Their Newspaper Properties. With Little Advertisement Improvement In Sight, Values Are Falling!
There is nothing that makes clearer how many newspapers are no longer a growth business than when their values are reduced in the company’s financials. There have been some big write-downs recently, and surely more to follow.

The Fall In US Newspaper Print Advertising Revenue Has Now Reached A New Negative Milestone – Even With the Double Digit Advertising Growth From Newspaper Web Sites Overall Advertising Revenue in Q3 Is Down
Overall US newspaper advertising revenue in Q3 came in at $11.8 billion, a 1.5% drop from a year ago. But newspaper web sites saw a 23% increase in advertising revenues over a year ago, so the sad conclusion for publishers is that their print revenue is now dropping faster than their superlative online products can replace it.

Is There A Correlation Between Internet Advertising Increasing 22% in 2005 While National Newspaper Advertising Dropped 4.7%, And That Some 50 Million Americans Now Turn to the Internet For Their Daily News Fix?
As broadband Internet access increases so will their users turn to the Internet for their daily news requirements, according to significant US research. And since 37% of adult Americans now have broadband compared to 10% four years ago, is it just coincidence that advertising revenue growth for traditional media fell last year while on the Internet it soared 22.3%?

Can Newspapers Maintain Their 20% Plus margins in 2006 On Print Ad Revenue That Could Actually Decline By 1.5%? The Answer May Rest On The Advertising Opportunities Their Own Web Sites Provide.
If a publisher takes as a basic premise that the trends of past years will continue in 2006 – that print advertising growth will be less than 5% -- the bears say it will actually drop 1.5% and fear that is too optimistic -- and that Internet advertising will grow from 20-30%, is there any way to continue the usual 20% plus margins?

For All the Bad News About Newspaper Performance These Days There Is Also Good News. And It Will Be the Smart Newspaper That Joins Both Pieces Of That Puzzle Together
The number of people reading newspaper web sites is increasing while visits to other news and information sites is decreasing. Can you put the puzzle together?

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Further Complicated: Advertising, Children and Television

Advertising and television face more complaints, criticism and new rules. ftm reports on the debate in Europe and North America 43 pages PDF file (March 2007)

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The State of the Print Media in the World

ftm reports from the World Association of Newspapers Congresses. Includes WAN readership studies, Russian media and Russian politics, press freedom and the state of journalism. 62 pages. PDF file (October 2006)

Free to ftm members and others from €39

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In spite of advertisers obviously shifting some of their spend to the Internet, and newspapers offering lower circulation and with little measurement to determine value for money, many newspapers took the view last year that for 2007 it was still “business as usual”, and they increased advertising rates. When USA Today said it was imposing a 6% increase ftm yelled out in print, “You can’t do that”, but of course Gannett went and did it anyway! Now the Q1 results are in and it takes great will power not to blurt out “Told You So!”

USA Today’s first quarter advertising revenue was down 7.9% year-on-year and paid advertising pages were down to 904 from 1,012 last year – a 10% drop. Management says it’s because of a drop in Olympics-related ad demand. Well, if management knew that Olympics advertisers wouldn’t be there this year did it really believe a 6% increase would encourage other advertisers to take their place?

And how did advertising increases affect the newspaper industry as a whole? The average fall was 4.5% according to Bloomberg, blamed mostly on dropping national advertising and the real estate market slump that really hit those classifieds.

You have to read through all the positive spin put out in the quarterly financial releases to really determine what is going on with newspaper properties:

New York Times Company: Total revenues decreased 1.6%; advertising revenues decreased 3.4%; circulation revenue saw a 1% increase based not on higher circulation but higher home-delivery rates -- circulation actually went down; revenue at about.com rose 23.8% but its operating costs increased 26.2% (always a bad sign when operating cost percentage is higher than revenue increase percentage); total internet revenue rose 21.6% and now accounts for 9.5% of the company’s total income compared to 7.6% but that good news is tempered by the bad news that internet advertising is growing more slowly than forecast and therefore the 30% growth that had been projected for this year won’t be reached. All of that should make for a merry shareholders meeting next week with the big investment funds not pleased with the company’s management structure and the financial results over the past few years.

Tribune: A quarterly loss. Publishing revenue dropped 5.5%; classified advertising down 14% with auto down 16%, real estate by 15% and jobs by 14%; national advertising was down 2%; circulation revenue dropped 7%.

Gannett: Overall newspaper ad revenue dropped 2% with classifieds down 3% and national ads down 5%; overall operating revenues down 0.7%.

Dow Jones: The Wall Street Journal advertising declined 1.7% on a 3.1% volume decline; In its Local Media division (daily and weekly newspapers outside of the Journal and Barrons) revenue declined 3.5% with advertising revenue down 4.6% on a volume decline of 8.7%; operating income down 25.2% with operating margin down to 8.9% from 11.5%.

Journal-Register: National advertising plunged 29.4%; retail advertising down 4.1%; classified advertising down 7.4% hurt the most by auto advertising down 20.7%; circulation revenue dipped 0.7%.

Media General: Led by publishing, the company reported a first quarter loss of $6.5 million; publishing division profit sank 31.3%; publishing revenues dropped 5.7%, newspaper advertising was down 6.6%; classifieds were down 13.8%, and at the company’s three main metropolitan newspapers auto linage was down 27.8%, real estate off 20.9% and help wanted down 17.7%. National advertising revenues were down 7%, circulation revenues dropped 4%.

All reported their digital revenues increased very nicely, but as everyone knows, that digital revenue does not yet replace print’s losses.

Anyone out there still believe that as far as newspapers are concerned it’s only cyclical?