Tail wags dog in newspaper ad sales
The good news is that online newspaper advertising grew at an average rate of 26.7% in 2004, according to the Newspaper Association of America, a trade group. The bad news is that the $1.5 billion in online advertising represented a scant 3% of the industry's over-all ad sales of $48.2 billion.
The aggregate gain of 4.5% in newspaper ad sales in 2004 falls well below the average 6.3% growth for all national media, as illustrated in the table below. For the record, this gives newspapers a bit better than an 18% share of all ad expendutures in the U.S. vs. 21% share as recently as 2000.
Because every publisher counts beans in its own way, it is hard to pin down the impact of online advertising on a given company's top line. But John Janedis at Banc of America Securities determined that nearly half of the 3.1% increase in Knight-Ridder's $2.35 billion in ad revenues came from online sales. If you subtract online revenues, therefore, KNI's ad sales grew by only 1.7% in 2004.
Elsewhere in the '04 ad wars, the biggest year-over-year percentage gain, predictably, was recorded in online advertising, where sales climbed 32% to an estimated $9.6 billion, according to the Internet Advertising Bureau, a trade organization.
As illustrated in the table below, which is based mostly on data from Nielsen Media Research, the average sales increase across all ad categories was 6.3%, making for aggregate U.S. ad sales of $260 billion.
Respectable double-digit gains last year were notched, natch, by broadcast and cable television, the usual beneficiaries of the quadrennial spectacles known as the Olympics and the U.S. presidential election. Above-average increases were achieved in outdoor advertising and national magazines.
Below-average performance was recorded by spot radio and TV, Advo-type coupon operations and, as previously discussed, newspapers, where it looks like the tail really is starting to wag the dog.