Online Publishers Report Booming Q1 Ad Revenue

The Online Publishers Association, a group representing the top names in online publishing, said its members withstood pressures from the war with Iraq, coming through the first quarter with flying colors where advertising was concerned.

In a survey, two dozen OPA members reported 40.7 percent average growth in ad revenue in the first quarter of this year compared to the same period a year ago. Overall revenue was said to grow an average of 37.6 percent.

The OPA reported the robust results in its regular roundup of members’ financial performance. The 24 participating members include some units of publicly traded companies, like the online arms of The New York Times Co. and Washington Post Co. , as well as private entities, like Forbes.com. The OPA survey did not include profitability information.

The ad-revenue data mostly jibes with the audited results of publicly traded publishers, which reported strong revenue growth. For example, New York Times Digital reported its first-quarter revenue was up 21 percent, Knight Ridder Digital’s rose 31 percent, Wasningtonpost.Newsweek Interactive climbed 27 percent. All three credited robust ad sales for their positive results, and both NYTD and KRD reported small operating profits. Washingtonpost.Newsweek Interactive’s profits are not broken out.

Online publishers thrived in the quarter despite the war with Iraq coming at the tail end, sending jitters rippling through the advertising community. While their offline parents blamed advertiser wariness for slumping first-quarter ad sales, most online publishers fared well in the face of the uncertainty.

After early decisions by many online publishers to strip ads from their pages in the opening days of conflict, most went back to normal within a week, limiting the damage done by the uncertainty of the war.

Forbes.com had a few advertisers put campaigns on hold for the first few days of the conflict, but soon they quickly resumed their campaigns.

“We can literally get somebody back up advertising in 30 minutes,” said William Flatley, chief advertising officer at Forbes.com, noting the advantage over other media with long lead times, such as magazines.

In contrast to Web publishers’ good fortunes, major newspaper publishers like The New York Times Co. and Knight Ridder said first-quarter ad sales were substantially weakened as a result of the war. Knight Ridder said the lingering effects of the war could stretch into the second quarter.

The OPA has worked hard to differentiate its members as the creme de la creme of content sites, including the online arms of many major offline publishers. As a result, OPA Executive Director Michael Zimbalist said ad dollars flow to the best content just like in traditional media.

“The strong ad revenue growth of OPA member companies provides further proof that advertisers are directing their spending toward high-quality content sites,” he said.

In the third quarter 2002, the last period the OPA surveyed, 18 participating members reported ad-revenue up an average of 35.7 percent and total revenue up an average of 47.4 percent compared to the same period a year earlier.

The OPA has trumpeted the Internet’s dominant role during the day. Earlier this month, the OPA released a study with Millward Brown InteliQuest that delved deeper into how people used the Internet during the day. The OPA, and its members, have sponsored a variety of research into the subject.

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