First Medium In, First Out For Newspapers

According to Borrell Associates, print newspaper ad revenues are expected to increase 2.4% next year, and then in single digits over the next few years, through 2014. According to Colby Atwood, president of Borrell Associates, the outlook for the industry will improve even more after next year. By 2014, newspaper income will be up a total of 8.7% over the 2009 figures, to slightly more than $39 billion (not including online revenues).

But this doesn't mean the old business model is coming back, the group said. "Even at 2014 levels of just under $30 billion, newspaper advertising won't be anything near the $55 billion we saw earlier this decade. Nor will it ever return to that level."

Smaller local newspapers are better positioned to do that than large urban dailies. The Virginia Gazette, in Williamsburg, says that "... newspapers (must) find ways to become more interesting, more relative to their audiences.... the 'major daily newspaper' is turning into a smaller, more delicate, colorful local magazine, with fair prospects for growth... providing rich local content that people seem to prefer in print. rather than screen, format."

The top five reasons why Borrell Associates thinks newspapers will rebound, according to a Marketing Charts summation:

  • Newspapers were the first medium that the internet forced into a "period of adjustment," and they will be the first to emerge from it.
  • The revenue decline has been much less severe for the majority of the US's smaller newspapers. Borrell expects growth for these papers to come from geographical targeting to non-classified, non-department-store local advertisers, even as larger papers continue to experience layoffs, abbreviated publication schedules and closures in order to "right-size" themselves.
  • Newspaper sales and marketing teams are evolving in earnest by becoming proactive about discovering and meeting customer needs, selling against the competition, and taking no client for granted, especially in local ad markets.
  • As the country's economy begins to improve, and the auto, real estate and recruitment sectors resurge, newspapers will capture a bit more of the resulting growth in ad spending than their current share. This will come in part from growth in pre-print and free-standing insert revenue from advertisers migrating out of direct mail.
  • Newspapers are using the web to generate a significant portion of their revenues and profits. Borrell Associates forecasts that side of the business will begin to provide more support to the print side.

Additonally, related to the newspaper industry recovery, Borrell says:

  • The papers that will do the best are the ones that can serve smaller advertisers on the marketing side by actively pursuing customers that have never done business with newspapers before.
  • Successful papers will do a better job on the editorial side by focusing on unique local content and less on wire service feeds.
  • If national advertisers could make a single newspaper buy, it would make an important contribution to newspaper growth.

For more information from the Marketing Charts summation, including graphic data, please visit here.


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