Financial Times sees positive trend in advertising

London: The Financial Times has seen a positive trend in advertising sales continue into the current quarter, its chief executive said on Tuesday, lifting hopes that a long-lived ad slump at the paper could be ending.

"The improving trend of last year has continued into the first quarter, but the outlook remains very short-term," John Ridding told Reuters in a telephone interview a day after the FT's parent Pearson Plc reported forecast-beating results.

Pearson shares slipped 0.2 per cent to 954 pence on Tuesday, underperforming a slightly firmer European media index. They rose to an eight-year high on Monday.

Pearson said on Monday it expected to see some stabilisation in advertising revenues at FT Publishing the unit that contains the Financial Times newspaper, FT.com, half of The Economist and other publications.

But it said advertising sales, which the education-focused group has whittled down to 3 per cent of total revenues, remained highly unpredictable.

FT Publishing reported a 12 per cent fall in 2009 sales to £358 million and a 42 per cent drop in adjusted operating profit to £39 million.

Still, the Financial Times and FT.com are unusual among European peers in that they are profitable, thanks largely to strong subscription and circulation revenues that are now larger than advertising revenues.

The FT is also one of the few newspapers currently to charge for its content on the web although many others, including the New York Times, are mulling or planning such a move.

Stealing revenues

On Tuesday, Ridding spoke on a panel with the New York Times Company's Chairman and Publisher Arthur Sulzberger as well as a representative of Web search giant Google, which is blamed by some publishers for stealing their revenues.

Sulzberger described his relations with Google, which is trying to improve relations with news publishers by directing users from free news search results to publishers' own sites where they may have to pay for content, as "very good".

"To denounce Google is sort of like denouncing oxygen," said Sulzberger, whose paper plans to start charging for online news next year. "It is part of the ecosystem we have to operate in."

Targeted subscribers

The FT and New York Times dispute a commonly held assumption that there is a necessary trade-off between advertising and subscription revenue, saying that subscribers can be better targeted and so are more valuable than mass audiences.

"The audience information that we've developed in having a registration/subscriber model is tremendously powerful. Content revenues are valuable and help complement and offset volatile advertising revenues," Ridding said.

He said that more valuable target audiences would not reduce the gulf between prices for online and print ads, but might allow publishers to hold online ad prices at current levels.

He added that the FT would not use readership information to dicate the FT's agenda, although it would inform it.

"What we're not going to do is edit by numbers. We have very experienced editors and our view is that the judgment they bring to bear is part of the value of the FT," he said. FT.com had 1.9 million registered users as of last month.

• 954p value of Pearson shares on Tuesday
• 12% fall in annual sales seen by FT Publishing
• 1.9m registered subscribers on FT.com