The Sun outperforms the ad market after phone hacking scandal

News International's remaining tabloid The Sun has avoided any commercial backlash from the phone hacking scandal which engulfed its Sunday counterpart News of the World this summer, to outperform the ad market.

The Sun sees ad revenues rise after NoTW closure
The Sun sees ad revenues rise after NoTW closure

Fears at the publisher that advertisers might retreat from The Sun following the negative publicity surrounding phone hacking have been allayed, according to figures tracked by Nielsen.

Far from advertising revenues receding, The Sun has actually gained market share in the immediate aftermath of News of the World closing, suggesting it has picked up spend previously directed into its Sunday sibling.

The Sun’s advertising revenues increased in August and September by 3.9% and 7% respectively. The monthly performances represent the redtop's first year on year sales lift of 2011.

The lift in ad revenues is expected to continue for the rest of year despite the wider market expected to be down by around 5%.

Rob Lynam, head of display at MEC, said: "The Sun has not appeared to suffer as a result of the phone hacking scandal, with its revenue performance improving year-on-year in both August (+3.9%) and September (+7.0%).

"As the main beneficiary of retail advertising, I would expect The Sun to post a marginally positive performance in each of the remaining months of 2011 – so far it is up by 3.0% in October."

Read comment on the future of News International and its commercial drive here.

For the period January to September 2011, Neilsen reports total advertising revenue for The Sun at £148,858,551, down by 5.9% on the same period in 2010.

The figures mean until the recent lifts, The Sun was underperforming both the market as a whole and also the daily market.

Lynam believes the £10m hole in The Sun’s annual revenue can be explained by large reductions among some of its key advertisers in 2011.

Top 10 advertisers Asda, Argos, and B&Q have each spent £1.1m less with The Sun year-on-year.

The COI has reduced its spend with The Sun by £1.5m, and JD Williams has spent £1.6m less. Gala Coral Group who announced a debt restructuring package in mid-2010 that lost their private equity backers £700m, has spent £1.5m less with The Sun this year.

The administration of the DIY chain, Focus, in May 2011, has also resulted in £1.2m in revenue disappearing along with £2.3m coming out as a result of the discount store chain, TJ Hughes, going into administration in June this year.

Follow Arif Durrani on Twitter @DurraniMix

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