Mirror publisher Reach pins profit drop on Facebook shakeup
- The company also saw its page views fall by 16.1 per cent to £60.1 million
- Reach’s ads fell 18.3 percent
The UK’s largest commercial news publisher has blamed a shake-up in Facebook’s content priorities for a major slump in its half-yearly profits.
Reach, which owns The Mirror, Daily Star, Daily Express and Manchester Evening News, posted a statutory operating profit of £11.1 million in the 26 weeks to June 25, down 67.8 per cent from the same time last year.
Group sales fell 6.1 per cent year on year to £279.4 million, while digital sales plunged 16.1 per cent to £14.1 billion.
The company also saw its page views fall by 16.1 per cent to £60.1 million over the same period
Reach chief executive Jim Mullen said: “Digital growth for the period has been significantly impacted by lower referral traffic across the industry, particularly as a result of Facebook’s deprioritization of news content, which reduced page views for publishers.
“Despite this and ongoing macroeconomic uncertainty, our focus on customer data means we’re generating more diversified, better-performing revenue, with greater exposure to direct-sold, higher-value advertising.”
It’s not the first time Reach has attributed declining revenues to Meta’s crackdown on Facebook news circulation
In April, Facebook owner Meta shut down Instant Articles, a mobile-friendly format that allowed users to read full articles on the social media website’s app without having to leave the platform to access them.
It’s part of a broader shift away from news-focused products at Meta.
Last year, Meta spokesperson Erin Miller claimed that only 3 percent of Facebook feed posts contained links to news stories, adding that “there’s no point in investing too much in areas that don’t match users’ preferences.”
But Reach’s print titles weren’t immune to a wider advertising slowdown either.
Circulation revenue was up 2.4 percent over the six months, but an 18.3 percent drop in ad revenue meant total revenue for the segment was down 2.7 percent.
Mullen said: “Our large audience and base of registered customers supports the growth of first party data, an important advantage in a market moving closer to a future without third-party cookies.
“The continued resilience and predictability of print is the foundation for continued investment in a strong digital offering, with circulation revenues rising and newsprint costs starting to fall.
Cash generation is supported by a focus on driving efficiency, with cost reductions on track and expected to support a stronger second half. ‘
Despite falling profits Reach stocks rose more than 17 percent on Tuesday morning to 80.3 pence.