European publishers see no signs of depressed advertising markets improving, they said on Thursday, contrasting with media mogul Rupert Murdoch’s comments on Wednesday that the worst might be over.
Germany’s Axel Springer, publisher of Europe’s best-selling tabloid Bild, said it saw no signs of an upturn in its main markets, and Finnish media group Sanoma also said it expected advertising declines to continue.
”We currently see no signs of recovery in our most important markets,” Springer’s Chief Executive Mathias Doepfner said in a statement, although he added later he did not necessarily see the advertising decline accelerating.
Sanoma — whose operations include magazines, newspapers, business publications, TV and education — said: ”In 2009, advertising and private consumption are expected to decrease from 2008 levels in all of Sanoma’s markets.”
British-based Mecom, which publishes newspapers in The Netherlands, Norway, Denmark and Poland, said it had seen a gradual stabilisation since a low point in February, but the crucial months of September to November would be a test.
”Indicators do not give us sufficient comfort to call the end to the advertising recession,” chief executive David Montgomery told Reuters. ”At most, we’ve stabilised at a rather low level.”
Europe lags
Investors have begun to turn to media, the cheapest cyclical sector in Europe, as hopes gather for a wider economic recovery, and leading media agency ZenithOptimedia predicted last month the slump in global advertising was nearing its lowest point.
Credit Suisse upgraded the sector last week, though it preferred professional publishers with more exposure to corporate spending.
European broadcasters, quicker to benefit from a corporate return to brand advertising campaigns and less exposed to a slump in recruitment ads that has hobbled newspapers, offered a glimmer of hope to the sector on Thursday.
But the European media results overall may be a measure of the extent to which the continent lags other regions in terms of any economic upturn.
Murdoch, chief executive of the News Corp global media empire, forecast on Wednesday that revenue for the fiscal year to next June would rise by 4%, although it would be driven by businesses not supported by advertising.
News Corp reported a 10,7% drop in quarterly revenue to $7,67-billion.
Other big United States media companies including Time Warner and CBS have said in recent weeks that ad declines were beginning to ease.
In Europe, publishers focused once again on cost cuts as the only way to get through the continuing crisis.
”The rest of the year will continue to be dedicated to cost control and we have raised our expectation of savings,” Mecom said in a statement after first-half advertising revenues tumbled 22%.
Springer credited strict cost discipline with its maintenance of a double-digit core profit margin, and Sanoma cut operating expenses by more than 5% in the first half, closed down 26 magazines and stressed efficiency improvements. — Reuters