Postmedia digital ad revenues rise again amid $15.5M quarterly loss
TORONTO—Postmedia Network Canada Corp. saw its digital revenues rise by double digits despite a $15.5-million quarterly loss.
Digital revenue increased 7.2 per cent to $29.9 million, with digital advertising revenue up 10 per cent, the Toronto-based company reported Wednesday.
“We are encouraged to see our sixth straight quarter of doubledigit revenue increases from our digital advertising initiatives yet we continue to see a rate of legacy revenue declination that outpaces our digital revenue growth,” chief executive officer Paul Godfrey said in a press release.
Canada’s largest newspaper publisher, which owns this newspaper, blamed declines in print advertising and circulation revenue for a 10 per cent drop in overall revenue during the third quarter, which fell to $171 million for the three months ended May 31 from $190 million in the same period last year.
“That reality means that we must continue to take the necessary steps to focus on areas where we can win and make the tough, yet decisive, decisions about where we need to make changes,” Godfrey said.
In the same quarter last year, Postmedia reported a profit of $13 million, largely thanks to a $22.8-million recovery from cuts to the employee benefit plan.
In June, Postmedia announced plans to further reduce staffing expenses by 10 per cent through a combination of voluntary buyouts and layoffs before the fiscal year end on Aug. 31. Employees have until Friday to accept the buyouts. This is the second major round of buyouts in two years. In November 2016, the company reduced staffing expenses by 20 per cent.
The cuts come as the traditional media industry faces disruption from the internet, as advertising revenue that formerly went to print, television and radio moves to internet giants like Google and Facebook.
Paul Godfrey, Postmedia CEO
It’s “incredibly difficult” to grow advertising revenue in a landscape that’s “totally dominated” by these two players, Andrew MacLeod, Postmedia’s president and chief operating officer, said in an interview.
Yet MacLeod said the company found a way to coexist with them by creating ad campaigns that align with the search and social media platforms.
“Using our expertise to gain as much of a share as possible of that larger revenue stream is critical to growing our overall revenue,” he said later on a conference call with analysts.
Postmedia is also re-architecting its digital infrastructure to better match audiences with targeted advertising, which improves the experience for both readers and marketers, MacLeod said.
MacLeod reiterated that Postmedia isn’t abandoning its print business despite what he described as a “life or death struggle” the entire industry faces against the global duopoly of Google and Facebook. Instead, he said the company is working to slow the decline of traditional revenue, adjust its cost structure and build its digital strategy.
We are encouraged to see our sixth straight quarter of double-digit revenue increases from our digital advertising initiatives yet we continue to see a rate of legacy revenue declination that outpaces our digital revenue growth.”