New York Times Co. warned that advertising bookings are slowing down as coronavirus makes companies more cautious, a message that sent publishing-industry stocks sliding on Monday.
Bloomberg reports Ad sales will drop by a rate in the mid-teens this quarter, with digital advertising down 10%, Chief Executive Officer Mark Thompson said. Subscriber growth has held steady, as has subscription revenue, which the company has leaned on more heavily in recent years as the print advertising market shrinks.
The warning from the Times signals that businesses are taking steps to rein in spending because of anxiety over how the spread of the coronavirus will affect consumer behavior. As of last week, about 220 companies in the S&P 500 index had raised concerns about the virus affecting results, including Apple Inc. and Microsoft Corp.
The coronavirus is likely to reduce ad buying, but not all media companies will be affected equally, according to Brian Wieser, global president of business intelligence at the advertising giant GroupM.
While the advertising impact from a potential recession is hard to anticipate, “it is highly likely that the impact will be negative, with growth in some countries softening, others going flat and others declining,” Wieser said Monday in a note to clients.
TV companies could do better, he said, because people will be staying home more, while outdoor advertising firms could fare worse because fewer people will see their billboards.
The upcoming Olympics are another question mark. Many advertisers create large ad campaigns around the games, which are scheduled for July and August in Tokyo.
As recently as December, Zenith, a ad-buying firm, had expected global ad spending to rise 4.3% to $666 billion this year. But on Monday, Jonathan Barnard, Zenith’s head of forecasting, said that number would be revised lower in the coming weeks because of the virus.
“Obviously, we weren’t expecting anything like this when we said 4.3%,” Mr. Barnard told The Wall Street Journal.
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