Newspapers Are Not Doing So Well

Posted by on Mar 28, 2008 in Business, Media | One Comment

Newspaper ad revenues have taken their worst hit in almost 60 years—worse even than 2001. Editor & Publisher has the all the ugly details:

According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006—the most severe percent decline since the association started measuring advertising expenditures in 1950.

The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

Total advertising revenue in 2007—including online revenue—decreased 7.9% to $45.3 billion compared to the prior year.

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.

That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

“Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms,” John Sturm, president and CEO of the NAA, said in a statement.

I think Mr. Sturm is missing the point here on multiple levels.

Of course, some of these results may be because of the economic, especially in real estate. But an awful lot more is at work here and the newspaper industry just can’t seem to grasp this simple fact.

1 Comment

  1. john smith

    Online is the best tool to generate the revenues for print publications. As the trend changes, readers also changed and they are looking for instant news reach and money savings. Having online edition will give more benefits as its production cost is less when compare to traditional publishing, instant reach, attract advertisers, user can access from anywhere, etc…

    Publishing over web, blogs, social media, RSS, pod cast, mobile, etc… are the emerging trends in publishing industry and these mediums made huge difference in circulations. Companies like helping the print publishers to distribute over the above mediums and helping in revenue generations. I think using these kinds of services would be very good advantage for print publishers.


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