Newspapers Face New Threat to Paid Advertising

Newspaper publishers are facing multiple challenges to their revenue streams. The auto industry and classified ad revenues have been shifting online. Now there’s word that another steady revenue source, public notices for state and local government agencies, is under fire.

Writing for Poynter, Rick Edmunds describes what’s been happening in this arena. In the past few years, more legislators have introduced bills that would allow government agencies to post legal notices online instead of in the printed newspapers which has been a long tradition. For some newspapers, up to 5% of annual revenue could be in play. Tight government budgets are often the reason given for making this change. The costs for publishing these notices can be significant. Two separate entities were listed as examples:

  • Cities such as Syracuse, NY spend $20,000 a year.
  • States such as Maine spend $500,000 a year.

Elected officials who are floating this proposed legislation also point out that printed newspapers are missing a big part of the intended audience because so many citizens are reading their news online. Another argument for the change centers on the amount of content that can be provided online – detailed maps, for example – that can’t be published affordably in the newspaper.

But, press associations across the country are fighting the proposed legislation which has been under consideration this year in New Jersey, Florida and Virginia. They point out that government agencies may not save as much  money as they imagine when they encounter the costs needed to maintain secure websites. There is also the requirement to post notices with an independent third party  — which is why the newspapers have always worked well for this purpose.

The continued pressure on ad revenues is a challenge for newspaper publishers and a reminder that they must strive to deliver online alternatives and find pricing models that work.

[Source: Edmonds, Rich. New revenue threat. Pointer​.org. 9 Feb. 2012. Web. 24 Feb. 2012] 
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.