Wednesday, November 21, 2007

Newspaper Ad Sales Up Online, Down in Print

The latest figures on the state of the US newspaper advertising industry indicate that print advertising sales have continued to plummet. Online ad sales, however, have risen significantly, though not enough to offset the sharp decline in print ad revenue.

The Newspaper Association of America said that print ad spending fell 9% in the third quarter compared to the same period last year to $10.1 billion. Online ad spending, which rose to $770 million, makes up just 7.1% of the industry's ad revenue, and though up sharply from 5.4% a year ago, it was still not enough to offset the declines in spending elsewhere. On the whole, newspaper ad spending fell 7.4% in the third quarter.

The biggest declines occurred in classified ads, retail ads, and national ads. The NAA blames the decline on "broader economic issues," such as fallout from the trouble in the US home mortgage industry.

Even so, this marks the 14th consecutive quarter that online newspaper ad sales have seen double-digit percentage gains, reports Reuters. While the industry as a whole continues to suffer, the Internet may be the light at the end of the tunnel.

The winners here may end up being online advertising networks, and especially Yahoo!, whose newspaper alliance continues to grow. Two weeks ago they added the New York Daily News - the fifth largest paper in the US with a circulation of over 700,000, and last week the consortium added 17 regional papers owned by the New York Times Co. (though not the Times itself).

Yahoo!'s alliance now reaches nearly 400 papers, and though right now it only covers online job classified ad sales (via Yahoo! HotJobs branded sites for newspaper partners), it it likely that it will expand to display ads in the future, at least for some papers. Further, newspapers in the Yahoo! alliance use Yahoo! for their web site search engine, which means added search revenue for Yahoo!.

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