US: Newspapers experience acceleration in falling ad revenues

Posted by Mica Swyers on July 19, 2007 at 10:07 AM

According to The Wall Street Journal, the initial slump from last year that has newspapers worried is accelerating, as sharply lower ad revenues from April and May 2007 demonstrate.

In the first quarter of 2007, ad revenue fell 4.8% to $10.6 billion for print and online, according to the Newspaper Association of America. Comparatively, the full-year decline for 2006 was 0.3%.

Revenue for every major ad category fell in the first quarter, but classifieds in particular dropped by a significant 13.2%, partially as a result of an inconvenient slump in the property market.

For 2007, Edward Atorino, an analyst for Benchmark Co., anticipates a 4.3% drop in total ad revenue, which would be one of the steepest in history.

Although online revenue has increased by 31.5% in 2006, it still represented a mere 5% of the $49.3 billion in ad revenue for the year.

Unsurprisingly, the accelerating rate of revenue decline has affected most major publishing companies. Gannett claimed to have experienced a 6.8% drop in May’s ad revenue, and New York Times Co.’s revenue fell 9.9%. The month also saw 11.5% and 3.4% drops at McClatchy and the WSJ, respectively.

Source: The Wall Street Journal through Poynter