US publishers face profits drop as ad market slows
Profits at US newspapers are set to fall as publishers brace themselves against a slowing in the US advertising market.
LONDON (Brand Republic) – Profits at US newspapers are set to fall as publishers brace themselves against a slowing in the US advertising market.
Publishers claim fourth-quarter advertising revenues are soft due to dotcom collapses and weak financial markets. They fear that the situation will not get better until next year.
Profits at Dow Jones, which publishes The Wall Street Journal, said profits per share would drop 10% due to falling financial advertising. News Corp said it was instigating a freeze on new hirings.
Knight Ridder, publisher of regional papers such as the Philadelphia Inquirer and the Detroit Free Press, said it would cut its workforce by 2% next year in a bid to cope with falling profits. The company has just cut jobs at its internet unit.
Tribune Co, which owns the Los Angeles Times, the Chicago Tribune and nine other dailies in the US, said its profits would also be down for the fourth quarter, due to flat advertising revenue.
The news comes after 1999’s bumper advertising year, as dotcom companies splurged on high-profile ad campaigns for Christmas. This year has been marked by a tightening of belts at most internet companies as others run out of cash.
Director of brand media planning at ad group True North’s agency FCB Worldwide Tyler Schaeffer said: “We are going from 100 miles per hour to a more regulated speed,” but added that some clients were looking to expand their ad spend.
In contrast the New York Times told investors on Wednesday that its advertising remained healthy in November.
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