Newspaper Publishers Struggling to Fill Traditional Ad Losses with Digital
On the surface, the news about newspaper advertising looks grim. Print revenue continues to fall when compared to previous year data and the gain from digital is slow to materialize. But, when the details are analyzed, there are a few bright spots to consider.
In the 2nd quarter of this year, newspaper publishers generated $4.781 billion in traditional print revenue. This is an increase over the 1st quarter but that trend is typical in the industry. A more important statistic is that revenue between quarters grew 9.6%. Last year, the comparable growth rate was only 9.2%.
Year to date, the major category spending – national, retail and classified – are all down. However, apparel retailers increased their spending in newspapers when Q2 2012 is compared to last year. Nationally, marketers spent more on newspaper in the computer equipment, coupons, foods, household supplies, insurance and publishing/media categories in the 2nd quarter of this year as well.
Newspapers have hoped to make up the ad shortfall with digital revenue. In Q2 2012, digital counted for 14.7% of total revenue. The quarterly growth rate for digital was 2.9%. Rick Edmonds at Poynter.org points out that for every $25 a newspaper loses in traditional print revenue, only $1 of new digital ad money is gained. The most commonly cited causes for this problem include:
- Generally low ad rates for digital
- Stiff competition from digitally-savvy tech giants
- Newspapers’ slow adoption of the new formats such as online video
The better news for publishers is that Sunday readership is up and NAA chairman, Jim Moroney believes the next quarter holds promise for increased ad revenue.[Sources: Edmonds, rick. Newspaper gets $1 in new digital. Pointer.org. 10 Sept. 2012. Web. 19 Sept. 2012; Trends and Numbers. NAA.org. 4 Sept. 2012. Web. 18 Sept. 2012]