The real estate downturn has had a wider effect on The McClatchy (NYSE: MNI) Company’s ad revenues apart from just lower classified dollars coming in. As chairman and CEO Gary Pruitt explained at the start of the company’s Q3 conference call, anything related to purchases for the home, such as furniture and department stores, all pulled back on advertising. Nothing that the ad market remains weak, Pruitt ticked off the print declines and the online revenue growth — with employment ads being a particular exception.
– Retail was down 12.6 percent, while online, the category grew 89 percent.
–Classifieds were down 30.1 percent. Employment ads fell 40.8 percent, while online revs were down 29 percent. Asked how much is cyclical versus secular, Pruitt said, “Secular pressures are greatest in classified, but the majority of the decline is cyclical and therefore, temporary. But it might get worse, before it gets better. California got into this recession first and we are seeing different results in different markets. We won’t see a significant rise of classified in a recovery, but classified display will pick up.”
– Autos were down 21 percent, online was up 28.7 percent, as dealers shifted spending. During the Q&A, Wachovia analyst John Janedis asked for some specifics about dealership closings. Pruitt said the fall has been gradual, but not precipitous. “We do expect our Cars.com to continue to take advantage of the shift from print to online.”
– Real estate dropped 36.5 percent; online gained 18.3 percent
– National ads fell 18 percent. Pruitt said online was up, but didn’t offer specifics.
– Moving away from print upsells: Pruitt: “We have been focused on becoming a hybrid digital and print company for some time. We are building out online ad sales in their own right, as 52 percent of internet ads were not tied to print upsells and were sold directly. Online advertising continues to remain the fastest growing part of our business.” More after the jump
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– Any asset sales planned? It’s a tough market to sell newspapers, but Pruitt said “We like our portfolio and we think we’re operating in the right places in the right way. We don’t comment or speak about potential asset sales of any kind, as we feel it sparks speculation. But we constantly evaluate our assets in good times and in bad times.”
– Sticking with AP: Asked about the recent two-year cancelation orders issued among some AP members — including, most recently, Tribune Company –over the changing pricing structure, Pruitt said McClatchy has signed a new deal with AP and was pleased with the rate reduction. That doesn’t mean our editors don’t have issues, but we are not part of the group that issued cancelations of memberships. And we don’t plan to.
– On Yahoo: The new APT targeting and ad delivery system is still a little too new for the company to extract any results. Nevertheless, Chris Hendricks, VP, interactive media, claimed that McClatchy had best performance in the Yahoo (NSDQ: YHOO) Newspaper Consortium, both with run of site and behavioral targeting and in particular, with autos. However, you just will have to take his word for it. Hendricks: “We cannot release numbers, as we agreed with the partners not to.”
– We will have growth: In a relatively tense exchange with one analyst, who expressed extreme doubt about Pruitt’s pronouncements of a return to growth once the recession eventually recedes, Pruitt tried to remain upbeat. “I’m not in the business of making economic conditions, but I can say we are making sensible decisions about costs and driving internet revenues, I can say we will have a successful future.”
– Headcount: The company had about 14,000 staffers and will down about 1,000 employees by year’s end. Pruitt also told analysts to expect more job losses through attrition next year.
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