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‘Tis the Season for Fewer Newspaper Ads

As important advertisers like Federated Department Stores Inc. and movie studios pull back on newspaper ad spending for the holiday shopping season, and as holiday spending forecasts predict only slight increases in spending over last year, newspaper companies are looking forward to lower-than-expected results in the third quarter, the Wall Street Journal reports.

Advertising from Federated accounts for more than 2 percent of the medium’s total ad revenues, so the company’s plans to shift spending away from papers could have serious results. Movie studios, a mainstay advertiser in newspapers, have been cutting back, too, with motion-picture advertising in the top 60 newspaper markets through July down 9.3 percent, compared with the same period a year ago, according to TNS Media Intelligence.

 

Knight Ridder, the second-largest newspaper company by circulation, cut forecasts for third-quarter earnings per share by 20 percent, while the New York Times Co. said ad revenue for its New York Times media group declined 0.8 percent in August compared to an increase of 6.9 percent last year. Lehman Brothers said in a report that the recent layoffs at the New York Times indicate that the paper’s advertising outlook is poor.