Newspaper Revenues Slide Again, Online Remains Sluggish

Newsstand-AA4There will be no reprieve for the newspaper industry in 2012, judging by the second quarter of the year, which saw yet another round of dismal returns.

Total advertising revenues dipped 6.4% from $6 billion in the second quarter of 2011 to $5.6 billion in the second quarter of 2012, according to the Newspaper Association of America. Print ad revenues dropped 7.9% from $5.2 billion to $4.8 billion, while online ad revenue growth remained anemic with a 2.9% increase from $803 million to $827 million. 

As in previous quarters, losses were spread across all the main advertising categories.

National advertising fell 9.7% from $985 million to $889 million, retail sank 7% from $2.96 billion to $2.75 billion, and classifieds slipped 8.4% from $1.25 billion to $1.14 billion. Within the classifieds category, automotive was down 6.3% to $251 million, real estate tumbled 19.3% to $179 million, and recruitment was down 4.2% to $188 million.

While positive, the tepid online growth rate is also disappointing in light of the earlier hopes of many publishers. Online ad revenue remains a relatively small part of newspapers’ business, at 14.7% of total ad revenues in the second quarter, and has consistently failed to match the growth rate of online advertising overall.

In 2011, newspapers’ online ad revenues increased 6.8% to $3.2 billion, compared to a 22% increase in total online ad revenues, per the Interactive Advertising Bureau. 

The fortunes of the newspaper business as a whole have plunged over the last six years. Total ad revenues in the first half of 2012 came to $10.78 billion, down 54% from a peak of $23.48 billion in the first half of 2006. Within these figures, national ad revenues in the first half of 2012 were $1.72 billion, also down 54% from $3.73 billion in the first half of 2006.

First-half retail ad revenues of $5.24 billion were down exactly 50% from $10.48 billion in the same period of 2006; and first-half classified revenues of $2.18 billion were down a vertiginous 73% from $8 billion in 2006.

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