eMarketer: Newspapers To See Online Ad Surge

Online revenues of U.S. newspapers will surge by an estimated 36 percent to $1.4 billion this year, according to a new report by research company eMarketer. What's more, revenues will continue to rise--by 23 percent next year, 16 percent in 2007, and 18 percent in 2008--according to the report, "Online Publishing: Focus on Newspapers."

eMarketer based its predictions on newspapers' published financial results and ad spending data from the Interactive Advertising Bureau and PriceWaterhouseCoopers.

The report, authored by eMarketer Editorial Director Ezra Palmer, points to several factors driving the growth of online newspapers' ad revenues. In addition to benefiting from the stronger economy, the report concludes that newspapers have seen gains because more consumers are going online to read news, and marketers are increasingly placing ads on the Web.

"The biggest advertisers are cautiously shifting their budgets online," wrote Palmer in the report.

eMarketer also noted that newspaper companies have rallied to recapture online classifieds. "Many publishers seemed blindsided by the rapid rise of online classified sites, but now they appear to be putting up a stronger fight--classified ads make up the majority of online ad revenues at most companies."

The report also predicts that the proportion of U.S. ad dollars spent online will climb from 4.6 percent this year--$12.9 billion of the $277.5 billion total media ad spend--to 7.5 percent in 2009, when $22.3 billion will be spent in U.S. online advertising out of a total U.S. ad media spend of $298 billion.

Separately, the New York Times Media Group, the New England Media Group, and the Regional Media Group together came up with a 31.8 percent year-over-year increase in online ad revenue in July, according to an earnings statement released on Thursday. The Times Company attributed the increase partially to strong growth in digital advertising and in all classified advertising categories. Reporter Gavin O'Malley contributed to this article.

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