Post­media dig­i­tal ad rev­enues rise again amid $15.5M quar­terly loss

The Recorder & Times (Brockville) - - NATIONAL NEWS - EMILY JACK­SON ejack­son@na­tion­al­post.com

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.”

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