Friday, July 20, 2007

The Decline in Newspaper Ad Revenue is Accelerating.

The Wall Street Journal reports today that "The downturn in the newspaper industry is getting worse.

"Last fall, newspaper executives and analysts were caught by surprise by the severity of a slump that took hold last summer. Since the beginning of this year, the rate of decline in advertising revenue has accelerated. Total print and online ad revenue was down 4.8% to $10.6 billion in the first quarter from a year earlier, according to the Newspaper Association of America, compared with its full-year decline in 2006 of 0.3%." You can see the acceleration in the chart from the Journal on the right.

Newspapers continue to increase their internet revenues: their 2006 online ad revenue was up 31.5 per cent. However, at only 5 percent of the total, the internet revenues are no where ner enough to offset the losses.

Direct mail spending continue to grow, but faces a strategic problem. While newspapers are rich in content, they are increasingly poor in ad revenues. Direct mail revenues grow, but the medium is increasingly poor in content.


vansant said...

I can understand the reason why newspapers are having a hard time generating sales. Newspapers are asking sellers to pay more money for a shrinking space. Let's take 3 examples of normal ads, "Free Pets," "Automotive Sales," and Real Estate (for sale not rent)."

Online and newsprint duration, size, and cost for an ad placed in The Wichita Eagle-
Free Pets:
*Package 1
7 days, 3 lines, $5.00
*Package 2
14 Days, 3 lines, $7.50

Automotive Sale:
*Package 1
7 days, 3 lines, $24.95
*Package 2
14 Days, 3 lines, $39.50
*Package 3
30 Days, 3 lines, $74.95

Real Estate (for sale):
*Package 1
7 days, 3 lines, $59.95
*Package 2
14 Days, 3 lines, $104.95
*Package 3
30 Days, 3 lines, $199.95

The average number of characters in a 3 line ad is around 285 characters. And being the average number of characters in an English word is 5, this amount to around 57 words on average. So in the average "Free Pet" ad the cost per word is 8.8 cents per word on the package 1 deal, not bad. For "Automotive Sales" the cost per word is 43.8 cents, not bad but the cost is rising. And for "Real Estate," $1.05 per word!
Holy cow! So in closing, if I was to post this ad for 7 days in the "Real Estate" section, it would cost me around $266.07. Do you think I could get this post on a rent to own plan???

Jesus Rodriguez said...

I agree with Vansants comment, it is ridiculous to do anykind of selling or advertising in newspapers, especially since you have lots of local online forums that will let you post ANYTHING FOR SALE( for FREE!!! Craigslist is the easiest, cheapest, and fast way to sell or advertise anything.