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Newspapers' Online Ad Growth Slowing

According to recent data from the Newspaper Association of America, online ad revenue growth is finally starting to slow down -- and that is not good news for the struggling industry. In 1Q, ad spending on newspaper Web sites was up 22.3% to $750 million over the year-ago period. But in the first three months of 2006, it grew by almost one-third.

Still, online ad revenue is still a bigger part of the total, at 7.1% in the first three months of this year, up from 5.5%. But that dovetails with a sharp decline in print, which fell 6.4% to $9.8 billion. The online growth was not enough to push up the total spend, which fell 4.8%.

Classified advertising was the worst performer, falling 13.2% to $3.4 billion, with sharp drops in real estate, help-wanted and automotive. "While the classified category demonstrates the impact of how consumers and advertisers use the various media options available today, newspapers continue to make aggressive moves to redefine classified advertising revenue through new online partnerships and other approaches that will position them for the future," says John Sturm, president and CEO of the NAA.



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