EARNINGS CALL

Pandemic Gives Tegna Advertisers A Good Deal

“We are seeing improvement week-to-week,” CEO Dave Lougee said of ad sales trends. He declined to give a number, but said it is not as bad as the 50% drop in local mentioned in the Fox Corp. conference call.

While the COVID-19 pandemic has dramatically reduced advertising demand, one analyst on the Tegna first quarter conference call today wanted to know if bargain rates are attracting any advertisers.

“When demand goes down, rates go down, right? We maximize the value of our inventory. Right now, it’s a great sales pitch to say to somebody to get people back on the air, which our sales teams are doing,” said Tegna President-CEO Dave Lougee. With ratings at record levels, businesses who are able to advertise will see their best return on investment ever.

“We are seeing improvement week-to-week,” Lougee said of ad sales trends. He declined to give a number, but said it is not as bad as the 50% drop in local mentioned in the Fox Corp. conference call.

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Prior to March 12, when the downturn hit, Lougee said the auto category was down, but not by much, and likewise for retail. As for the recovery, he noted that the categories which may be impaired the most aren’t necessarily huge categories for Tegna.

“Airlines and cruise ships are not big parts of our business. It remains to be seen, but entertainment has been a decent sized part of our business and one that we probably have concerns about where it comes back. Otherwise, I think we’ll probably do a little better than people think,” Lougee said. He suggested that the auto manufacturers will want to get back and claim market share.

Location may play a role in how fast a broadcaster recovers. “We’re huge in Texas,” Lougee noted, and that state is already reopening. Likewise, Tegna has large parts of its station portfolio in Florida and Georgia, which are also allowing businesses to open up earlier than some other states.

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Looking back at the first quarter, EVP-CFO Victoria Harker listed advertising categories that were up or flat that included home improvement, medical, media, telecom, education and banking/finance. Those down included travel, auto, retail, services and restaurants.

The Premion OTT business hasn’t been hit as badly as traditional broadcast, Lougee told analysts. Prior to COVID, Premion was enjoying double-digit growth. “Premion has obviously pulled back some, but its pacing is far better than traditional broadcast,” the CEO said.


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