Newspaper Ad Revenue Falls Record $2 Billion

LOS ANGELES — U.S. newspaper advertising revenue collapsed by nearly $2 billion, or 18 percent, in the third quarter, according to the Newspaper Association of America, an industry group. Even online ad revenue made a small U-turn for the second quarter in a row.

The year-on-year quarterly percentage decline is the worst since since the NAA has been keeping such records and represents an increasingly rapid deceleration that began in the third quarter of 2006, when total ad spending dropped 1.5 percent.

The figures, updated on the day before Thanksgiving, show total ad spending at newspapers fell 18.1 percent to $8.94 billion, down from $10.92 billion in the third quarter last year.

The last time total quarterly ad spending fell below $9 billion was in the first quarter of 1996.

Print ad revenue dropped 19.3 percent to $8.19 billion from $10.15 billion. Online ad revenue fell 3 percent to $749.8 million from $773.0 million a year ago _ a remarkable turnaround since the steady double-digit growth from 2004 to 2007.

The 7.2 percent increase in online ad spending in the first quarter of 2008 was the last quarter of year-over-year gain.

Comments

[wm1066]

Ad revenue is the first thing that suffers in an economic downturn, I know, I have worked in commercial photography and and been layed off every time a Republican administration has slowed down our economy since the seventies. Republicans are bad for business, but they sure profit from it!

[provgrays]

This is devastating and greedy boards of directors demanding ever more for the stockholders each quarter share much of the blame. The L.A. Times debacle leaps to mind. Newspapers can't cleaver their way to sustained profitability. Newspapers used to be a public trust. Now, the public be damned.

The drop in classified ad revenues was inevitable with the rise of computer sources, but a laptop cannot provide the order, convenience and completeness of a well run newspaper. They are truly doomed because the young don't read and they have less desire to read every year.

If newspapers are only wanted by older people outside of the sexy demographic that never reads anyway, then this is as much a cultural indictment as it is a technological sunami.

[youknowwhat]

I'm not surprised. How many times did you see anything about the Iraq war on the front page of your paper, or Scooter Libby's indictment, or Gonzales purging the Justice Dept., or that Valerie Plame thing, or the 9 billion dollars that was lost in Iraq and many other countless things that newspapers are supposed to report on.
Our major papers have chosen not to report detrimental news on this administration on their front pages. I remember the papers keeping us up to date on the Lewinsky affair daily though.
The newspapers have made a choice of not telling us what we should know, but trying to tell us what they want us to know.

[johnnydajogger]

Exactly right. Also, we didnt see much about the 1.2 million dead Iraqi civilians. Main stream media cant be counted on to report the real news so the internet is our only source.

[nogimmicks]

That is good. Save the trees, do not buy newspapers. The best newspaper is internet.

[Gasparilla]

I doubt that few people actually read more than a couple stories on the "internet newspaper" because you have to keep clicking on to various sections. Which means people are not really informed. Nor are local stories and local politics likely to be covered on any exclusively internet paper. And there is this wonderful thing called recycling. Even if your city does not pick up, some communities have central recycling. It's all a matter of doing it, instead of whining about it.

[MujerAlta]

I've been mulling canceling my subscription to the LA Times. It used to be a treat for eyes and mind to read my Times but the first section - especially the front page - that used to have gripping international and national news from the Times own bureaus now can't decide if it's International, national, state, local, business, sports or entertainment. and they're filling the inside with more and more AP reports. They've axed the community reporting and announcements that used to keep us connected to the greater LA area. The Sunday magazine has been revamped for the hot, chic and rich. The op-ed pages are nothing but vapid opinion by mostly unknowns and without editorial cartooning. This morning I realized that the only reason I'm still subscribing is habit, the Sunday circulars and the comics. It's been sad watching a truly great newspaper kill itself. I'm getting tired of opening the paper and of being disappointed every morning.

[Daniboy]

The left leaning newspapers just don't get it-turn off the people on the right and you've lost half your business-a no-brainer they just don't get!

[colette]

It's interesting that in Asia and Europe newspapers are still very popular, despite the reach of the Internet.
You can certainly find breaking news quicker online. But the biggest online news sites, and some of the most popular and trusted, are those belonging to newspapers. There you have trained journalists covering local and national news, doing trench investigative reporting that TV doesn't bother with (consider the Walter Reed Hospital scandal, which took two excellent journalists six months to report), not just pundits and people with an ax to grind.
Also, local cultural institutions will suffer immensely if there are no newspapers covering them.
Yes, the financial model isn't working in this age of high tech and insta-mation. and not all newspapers cover their communities well. But most pay trained writers decent wages to do honorable work. It would be a great loss if they were not around in some form.

[mh01]

Is anyone surprised? They used all their capital to promote "the one". and someone saw through it? wow?

Apparently buying a president is expensive.

[SnapShots]

To FrictionSoul: If you mean to say the decline is not new news, I agree, but if you say it's not news at all, I strongly disagree. Ironically are witnessing a paradigm shift as significant as the proliferation of the printing press

This has been a perfect storm for the newspaper industry: changing demograpics, growth of the internet, changing media habits, declining readership, declining advertising revenues, increasing operational costs, diminished product value as a result of reduced editorial staffs, pressures for increased profit from Wall Street, lack of industry foresight, and failure to adapt and innovate in a changing paradigm.

As a lifelong newspaper industry person, nobody can be more disappointed than me. We are not only seeing the erosion of one of our country's original public trusts, but a diminished level of journalistic standards within the industry.

[wpiv926]

I had canceled my subscription to my statewide paper, the Arkansas Democrat-Gazette a while back. But, I decided to renew it recently just after the election, so as to keep up with every bit of information on President-elect Obama. One thing that on-line publications just cannot replicate is the ability to save the stories for a later date.

I was going thru my closet the other day and came across the paper from Sept. 12, 2001. In it, the Democrat-Gazette ran a huge, 28-point bold type headline 'HOW MANY DEAD??" with a picture of the burning World Trade Center the entire length of the front page. You could read how people felt back then, as it happened. You could also see this in action immediately after Obama was elected, as newspapers across the country sold out and publishers rushed to restart their presses to print an unprecedented number of re-prints. They were selling copies of the New York Times for $3 in Manhatten that day I heard, and still couldn't keep up with demand.

Newspapers still have a place in our society, and I hope that people will still support them.

If I had only 2 choices: FAUX News or my local paper, I would choose the paper.

[Larkinvos]

Gee, there's a ringing endorsement.
That's what's known as, "damning with faint praise."

[BJANZ]

The newspapers are living on overtime... their role on PAPER format is over...all print is in seriuos decline. Save the trees and ignore yesterdays news....

The Newspaper Cemetery

http://www.ecommercetimes.com/story/57512.html

[Gasparilla]

And local stories and local election races are going to be covered on the internet more than superficially? Dream on.

[josephXY]

There is possibly something goog in the bad.
Danny Schechter, media critic, occassionally writes for the Huff Post. He criticised, among other,
the role of the media in the sub-prime disaster, the frenzy with which they hyped it all up.
(To find Schechter, one just has to type in his name in the search bar and his articles come up.)

And here is an article from the UK Guardian, in which a former editor admits ...:
Will Hutton criticises media's role in financial crisis
http://www.guardian.co.uk/media/2008/nov/21/events-pressandpublishing

The vehicle for the finance crisis, so to speak, was advertising. For instance the many ads for
credits and mortgages. Just one aspect.
Interesting in all this that just the decline of ad revenue now is an issue, but not .... that the
media, newspapers included, brought about their own misery in the long run. Nemesis.

[esmerelda99]

As a former newspaper person (not a journalist), I can say that what has killed newspapers are the following:
- Lifestyle changes. People don't have time to read papers anymore and because it's possible to get news in other ways (internet, TV, radio), people take the quick hit news over the in-depth reporting
- Decline in ad revenue. As noted above, people aren't reading papers as before. Newspapers got much of their revenue from ads--especially classified ads, cars, and retail stores. Ever take a look at what's been happening with those businesses lately?
- Resistance to change. Newspapers saw the internet coming and were too arrogant to realize that it would mean them having to do business differently at some point. Almost without exception, they chose to ignore the inevitable. Now, they are scrambling to reshape their infrastructure--fighting unions and trimming redundant jobs. Only now they are trying to do this right at the time when they have the least amount of flexibility.

There is a place in our society for good news gathering. We need to have sources who check and re-check their information before putting it out there. Our society will be doomed if we allow it to run on gossip and soundbites alone. However, newspapers--or the practice of newsgathering for mass publication (which will likely not be in paper form some time in the near future) will have to change significantly...and quickly.

[KeepMeLearning]

I used to work for a division of what used to be Knight-Ridder (I wasn't a journalist, either). They totally missed the boat because they refused to look at the massive changes that technology--and especially the Internet--was bringing. I think the beginning of the end started around 1995, just as the Internet was getting its legs (about the time I left), and newspapers have gone downhill ever since. Knight-Ridder was eventually purchased by McClatchy, and McClatchy is now in the tank.

I also agree that there is a place for good journalism--and that we're in big trouble if there's nothing left but tabloid news and mini sound bites that are passed off as "news."

Another couple of arrogant industries about to take a hit are the television and film industries. They don't even see what's coming, even though the experiences of the music industry are right under their noses. I've been there, seen that--I've been watching the trends in these industries for the past 6+ years--and it's about to hit again.

[SailFree]

1) The internet.
2) The lack of credibility engendered by rather blatant partisanship and news slanting by most of the major newspapers in the country.
3) Once the people have lost confidence in the impartiality of journalists, it's hard to win back. And it appears that they aren't all trying, though the Campbell Brown "questioning" of Obama is an attempt to appear fair after shilling for him the entire campaign. Most of the other media may make the occasional fake "hard hitting" question to Obama, but it will take more than that to convince the public they are being fair now.

[MujerAlta]

Journalists/newspapers have rarely, if ever, been impartial. When we had multiple papers available here in the LA area everyone knew that the Times was Republican and the Herald-Examiner, Democratic. Even the local papers, which used to be daily and are now weekly, would have a point of view that mirrored that of the local population. Even with radio and TV, people used to subscribe to newspapers and read them. Our lives weren't as filled with tasks and as busy as they are today and knowing what was going on around us was important to us. The papers kept us connected to each other and to the "outside" world no matter what their slant.

[scoochman]

Out here in Oregon, logging was once a billion-dollar business and now the state is running a 7.3% unemployment rate. We can thank the tree hugging spotted owl k.ooks for that.

As for newspapers, people are too busy today to read them. With online news, there's no point in buying them. Companies should keep them online and charge a monthly fee.

[Gasparilla]

Are you claiming there's no logging now? I highly doubt that.

And I do not want to see newspapers disappear. A lot of people say let everything be on the internet. Of course a lot of the stories on here are from the print papers. Nor will local news be covered in any depth.