Ad Declines For Newspapers Underscore Need For Diversified Revenue

Newspaper publishers have seen a drastic drop in advertising sales this year, underscoring the need to diversify their revenue as much as possible during the recovery from the pandemic recession. They have suffered disproportionately, compared with other media outlets, according a Pew Research Center study

However, It doesn't explain what made newspapers so vulnerable to the disruptions of the health crisis.

Ad revenue for newspaper publishers fell by a median of 42% in the second quarter from a year earlier, while circulation revenue slipped 8%, according to the study of publicly traded publishers. Pew's analysis included Belo, Gannett, Lee Enterprises, The New York Times, Tribune and McClatchy, which isn’t public any longer, after being acquired out of bankruptcy in September.

Digital ad revenue for publishers fell by a median of 32% during the early days of the pandemic, according to Pew's research. That's unfortunate, considering other studies have indicated that homebound consumers increased their consumption of digital media as they sought news updates about the pandemic.



The decline contrasted with the 2% gain in ad revenue for the three major cable news networks, though there were key differences among CNN, Fox News Channel and MSNBC. Fox's 41% jump in revenue more than offset CNN's decline of 14% and MSNBC's drop of 27%, though all three networks experienced higher viewership.

Ad revenue for nightly network TV rose 11%, with ABC's 21% increase outpacing NBC's 7% and CBS's 3% gains, as viewership hit records, according to Pew's analysis.

Newspapers likely experienced steeper drops in ad revenue than TV news outlets, due to their dependence on local businesses for revenue. While some national brands may have been locked into upfront contracts or increased their spending in the scatter market, the same cannot be said for smaller businesses that advertise in newspapers.

Many local papers sell ad space to retailers, real-estate brokers, car dealerships, restaurants and entertainment venues that were forced to shut down or curtail their operations during pandemic lockdowns. It's not clear how much of that lost ad revenue will come back, making other sources of revenue, such as subscriptions and digital paywalls, more important for publishers.

4 comments about "Ad Declines For Newspapers Underscore Need For Diversified Revenue".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, November 2, 2020 at 8:07 a.m.

    Newspapers and other publishers got hooked on and now addicted to programmatic ads. Worse, with programmatic is dependence on page views paid on CPM instead of actual performace clicks with CPC and CPA. The real knife the throat is their data can be bought on the open market. The newspapers wonder why they have so many problems? It's not all about contents. It's about good management.

  2. Ed Papazian from Media Dynamics Inc, November 2, 2020 at 9:31 a.m.

    Rob, ad revenues fo many newspapers have declined steadily for years---in large part due to competition from TV news and, later, from the Internet. It's not just a question of eyeballs moving to new venues---though that, too, has happened. It's far more a reflection of old versus new ways of communicating information. People want instant news not a once -a -day report, clogged with ads and editorial about subjects they are not interested in at  that moment. And they want the latest info---now---  not a half day  or longer after the fact. While newspapers have made strong strides in generating usage of their websites, this has not  replaced losses in circulation and ad dollars for their printed editions. What's next? For most papers, we will probably see only one printed edition per week----on the weekends---with an almost total orientation on local/regional news, while the daily editions will move online and attempt to be lean and mean---and far more timely. Will this work? Maybe---but it may be a case of locking the barn door after the horses  have escaped.

  3. Robert Williams from Mediapost replied, November 2, 2020 at 10:32 a.m.

    Thanks, Craig!

  4. Robert Williams from Mediapost replied, November 2, 2020 at 10:32 a.m.

    Thanks, Ed!

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