• by Ross Fadner , November 23, 2005

The good news according to official newspaper industry estimates released Tuesday is that ad spending climbed 2.4 percent in the third quarter. The bad news for the still primarily print medium is that print ad sales rose just 1.6 percent, while sales for online editions soared 26.7 percent.

The third quarter's modest gain is the medium's worst advertising performance in what has been a decidedly negative year for most papers. In addition to slackening ad demand, major publishers have had to contend with rising costs, declining circulation and several rounds of job cuts at major papers.

However, the silver lining comes from newspapers' online properties, which will continue to grow its share of newspaper revenues. Online readership is growing at a healthy pace, and more and more advertisers will shift their budgets online in pursuit of greater targeting and reporting capabilities.

According to estimates released Tuesday by the Newspaper Association of America, advertising expenditures totaled $12 billion in the third quarter. Of that, advertisers spent $11.4 billion on print and $519 million online.

The NAA said national advertising fell 4.7 percent from last year to $1.8 billion, due to declines in telecom, travel and motion picture advertising. Classifieds showed a steady 5.5 percent increase to $4.2 billion due to particularly strong real estate and recruitment spending. Not surprisingly, automotive was the weakest classifieds category, down 5 percent. Retail spending rose 1 percent to $5.3 billion.

For the year, the NAA estimates that total newspaper spending sits at $35.1 billion after three quarters, a 2.9 percent increase over the same period last year. Print ads account for $33.6 billion of that figure, 2.0 higher than at the same point last year. Classifieds spending is $12 billion so far, up nearly five percent, while retail has grown 1.7 percent. National advertising is down 2.7 percent for the year.