US newspaper ad revenue in free fall

From Slate:

Here?s a quick reminder that, despite the upbeat story lines we?ve heard about the greater media business during the past year or so, most newspapers are still very much in free fall. At the American Enterprise Institute?s Carpe Diem blog, Mark J. Perry finds that print ad revenues are now the lowest they’ve been since 1950, when the Newspaper Association of America began tracking industry data. Again, that’s 1950, when the U.S. population was less than half its current size and the economy was about one-seventh as big. Revenues are down more than 50 percent in just the past five years alone.

Wait? Where are these upbeat stories mentioned?

Story also notes that digital ad revenue is not growing.

5 thoughts on “US newspaper ad revenue in free fall

  1. That’s fascinating.

    At risk of playing economist in a field where I lack all kinds of information, I suspect that this is a mixture of “zero-sum game” (limited number of advertisers) and “disruptive innovation” (internet advertising is less expensive than newspaper advertising.)

    The decline in the number of newspaper subscribers, and the decline in the number of actual newspapers certainly affects the number, and the disruption of online news is pretty clearly the cause.

    On the flip-side:

    During the free-fall period my readership has grown about 10x, and my ad revenue has gone up by about 20x. It’s a terribly wobbly data-set, but if my audience has grown along one curve, while my ad revenue has grown along another, the implication is that more money is being spent on Internet advertising now than was being spent on it 10 years ago, and that a lot of that money is coming from advertisers and ad brokers who have migrated portions of their budget away from print.

    Of course, ANOTHER implication is that audience scale attracts better advertisers, and the two curves are the same plot, with the audience line affecting the ad revenue line non-arithmetically. My data-set is too small to prove anything conclusively, other than “I make more money than I used to.”

  2. The Internet, as an advertising medium, plays only a very minor role in this.

    For instance:

    The “since 1950” part and the “since the peak” parts are separate, first of all, because, if you look back to newspapers from 1950, you’ll find national ads you would never see today because they began purchasing network television instead. In addition, movies used to be “bicycled” around the country, which is to say, a limited number of prints were in circulation so that a movie would debut in major markets but hit smaller markets later, and local newspapers would be the medium for letting people know.

    Since the peak is more complex, because much of what has happened doesn’t entirely line up with the specific years. I’m surprised that the high point was that late. Certainly Craigslist was a major way in which the Internet IS responsible, but there are many others — for instance, the rise of major chains like Wal-Mart and Rite Aid, which supplanted local stores and which, again, use TV as their medium of choice for promotion.

    There are others, but the Internet is only one part, and most of its influence is somewhat indirect. (For instance, the rush to give away content was idiotic, but it was a decision made by tech-stupid newspaper owners, not something forced upon it by the existence of the medium. Craigslist being sort of the opposite — failure to respond to the threat was stupidity, not inevitability.)

  3. Newspapers no longer have the regional monopolies and duopolies as the source of community information, the audience size or engagement, or the desireable demographics to maintain advertising revenue levels. They’re very much in terminal decline.

  4. The internet didn’t really start biting into newspaper revenue until the widespread consumer adoption of high-speed internet and mobile devices. A newspaper is more convenient than a desktop PC tethered to dial-up but not a mobile smartphone with a 4g connection.

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