Local Retailer Ad Plans Threaten Newspapers

Newspaper publishers continue to feel financial pressure. The latest quarterly figures from the Newspaper Association of America show an increase  in Quarter 2, up 13.9% over Quarter 1. The ad revenue for Quarter 2 was $6.438 billion. And this year, the online portion of ad revenues has been growing for newspaper publishers in real numbers. But the online component of ad revenues for newspapers came in at 11.55% in Quarter 2, slightly lower than the Quarter 1 rate of 12.2%.

This mixed revenue picture also must be considered in light of marketer plans for the rest of this year and beyond. Currently, retail comprises nearly 50% of print ad revenue for the typical newspaper publisher. But the results of a recent survey show this revenue stream is threatened.  On his Newsosaur blog, Alan Mutter points to the survey carried out by ITZBelden and the American Press Institute this summer. Findings indicate that nearly 1 in 4 retailers will cut the ad budget allocated for print newspaper this year. The typical local business will distribute 23% of its media budget to print newspapers.

Not surprisingly, the beneficiaries of the ad budget shifting will be online and mobile media formats. Mutter is not alone when he calls for newspaper publishers to establish themselves as experts in managing in new media so they can help marketers maximize the outcomes of their ad investment. It is a clear but competitive path to revenue growth.

[Sources: Quarterly Advertising Expenditures. Newspaper Association of America. Naa​.org. 2010. Web. 8 Oct. 2010; Mutter, Alan. 1 in 4 local firms plan newspaper ad cuts. Newsosaur​.blogspot​.com. 20 Sept. 2010. Web. 8 Oct. 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.