Media companies saw drop in ad revenue

You might enjoy seeing fewer ads, but the companies producing the content you’re enjoying could be suffering as tightened advertising budgets are bruising the bottom line of numerous media companies.

In its most recent earnings report, AMC Networks announced a 17% decline in advertising revenue, which adds to a string of such announcements for the entertainment company: a 20% drop in the prior quarter, and a 12% decrease the quarter before that. In fact, you have to go all the way back to Q1 2022 to find the last time ad revenues were up for AMC. In that time, quarterly ad revenue has shrunk from $201 million to $167 million.

At Warner Bros. Discovery’s TV networks, ad revenues were down 6.5% YoY.

Ad revenues were harder to come by in the news business as well. At newspaper publisher Gannett, advertising and marketing services revenue was down nearly 8% YoY, even as the company generated nearly 17% growth in digital subscriptions. At Fox, advertising revenue was down 4% from a year ago, while other revenue was stable.

The New York Times, meanwhile, reported its advertising revenue was “approximately flat” overall, but with a divide: An 8.6% drop in print ad revenue was mostly offset by a 6.5% bump in digital advertising.

Advertising budgets tend to drop during periods of economic uncertainty, and even though the US economy hasn’t seen a recession this year, as many predicted, it’s clear that many companies found a way to trim budgets by cutting their ad spending.

Higher ad budgets could be a sign that companies are betting on a recovery. And there might be some signals that’s happening.

“Brands who tend to be more conservative have started to think more aggressively with less talk of a recession,” Seth Hargrave, CEO of media buying agency Media Two Interactive, told Digiday. “While Q4 is always a strong quarter for spending, we’re seeing spillover to Q3 that’s actually putting our forecasts closer to equal for those two quarters.”

Even amid the wider drop, one sector experienced at least some growth in advertising revenue over the past quarter: Big Tech. Meta managed to generate a YoY bump of nearly 12%. Google reported a more modest increase—3%—after two quarterly drops in a row.