Newspaper sales fell almost $2B in one quarter
Newspaper advertising sales dived by a record 18.1% in the third quarter in a historic, across-the-board rout paced by a nearly 31% plunge in classified revenues.
Eking out $8.9 billion in print sales in the three months ended in September, the industry shed a bit less than $2 billion in revenues from the same period in the prior year, according to statistics published quietly on the afternoon before Thanksgiving by the Newspaper Association of America.
Ad sales in the quarter dropped by record high percentages in every single category, including interactive sales, which the industry had hoped would offset deep secular declines in print ad demand.
Falling for the second quarter in a row, online sales slipped by $23.2 million, or 3%, to a bit under $750 million. The category fell 2% in the second quarter, the first time ever that it posted a sales decline.
Retail advertising, which delivers some 45% of the industry’s advertising revenue, dropped 11.7% in a year’s time to a bit under $4.5 billion.
The debacle was worst in the three principal classified advertising verticals:
:: Recruitment classified sales plunged 43.6% to $497.5 million.
:: Real estate classifieds tumbled 38.6% to $629.3 million.
:: Automotive classified fell 29.2% to $563 million.
The performance in the third quarter was affected only partially by the worldwide financial panic that froze the credit markets in mid-September, throttling the already waning demand for hiring, auto sales and home purchases.
The outlook for the final period of the year is worse, when the three classified verticals are likely to experience the full impact of the economic meltdown.
Eking out $8.9 billion in print sales in the three months ended in September, the industry shed a bit less than $2 billion in revenues from the same period in the prior year, according to statistics published quietly on the afternoon before Thanksgiving by the Newspaper Association of America.
Ad sales in the quarter dropped by record high percentages in every single category, including interactive sales, which the industry had hoped would offset deep secular declines in print ad demand.
Falling for the second quarter in a row, online sales slipped by $23.2 million, or 3%, to a bit under $750 million. The category fell 2% in the second quarter, the first time ever that it posted a sales decline.
Retail advertising, which delivers some 45% of the industry’s advertising revenue, dropped 11.7% in a year’s time to a bit under $4.5 billion.
The debacle was worst in the three principal classified advertising verticals:
:: Recruitment classified sales plunged 43.6% to $497.5 million.
:: Real estate classifieds tumbled 38.6% to $629.3 million.
:: Automotive classified fell 29.2% to $563 million.
The performance in the third quarter was affected only partially by the worldwide financial panic that froze the credit markets in mid-September, throttling the already waning demand for hiring, auto sales and home purchases.
The outlook for the final period of the year is worse, when the three classified verticals are likely to experience the full impact of the economic meltdown.
posted by Newsosaur at 5:43 PM
9 Comments:
If online advertising lost only $23million then am i to assume print advertising and circulation accounted for the other $1.97Billion?
It's secular all right. One look the highlighted statistics presented in the NAA's “Why Newspapers? They Add Value For Advertisers 2008” and you can see how uncompelling it all is.
http://www.naa.org/TrendsandNumbers.aspx
"The newspaper is the most used advertising source for coupons" -
Yes, it's true. You can't cut physical coupons out of the tv, internet, or radio.
"Customers for many products and services are also the heaviest newspaper readers."
- Yes, and when their circulation falls to 100 people, that will still be true.
"The newspaper is still the number one advertising medium for auto dealers."
- The best vertical segment has ~25% market share.
"15 million adults plan to buy a computer in the next year; 61 percent read a daily or Sunday newspaper. "
-- They still think of the paper as this single bundle with little measurement of conversion to purchase. It's all so gross level, If a person read a paper in the last month, and the person plans to buy a computer in the next year... do they really believe this level of justification is enough to get an advertiser to spend their money in the current environment? presumably 99% of computer shoppers also used the internet at some point... It's like they think their competitors don't exist.
Key benefit of newspaper ads: "Detailed, up-to-date information that enables consumers to make informed
buying decisions."
-- What universe are they living in?
"51% of adults find newspaper advertising Somewhat or Very Useful"
- presumably nearly 50% find newspaper advertising "Not Useful", extraordinary.
My personal favorite, "Newspaper maintains a significant presence among adults of all ages. And as adults mature, readership increases."
- No, they're not losing our younger readership. People "grow into" newspapers as they get older.
It's a like see/hear/speak no evil universe. The key takeaway for me is the industry in its own best light sees no durable advantages to sell. No advantages which can be expanded to additional segments of new or existing customers anyway. (Coupled with falling market share overall, high fixed costs, and debt up to their eyeballs.). No amount of cost-cutting is going to fix this.
Maybe the newspapers should follow the banks' example and segment the news staff into a "good paper" (much fewer journalists, digital, independent, and solvent) and a "bad paper" (printing presses, trucks, paper, sales staff and bankrupt) before it happens with a bankruptcy judge in-between.
Alan, have you seen the profit figures that Jim Hopkins has posted on the Gannett Blog?
Someone leaked him the numbers for Q1-Q3 '07. Not surprisingly, many of the Gannett papers were still posting double-digit margins.
Obviously much has changed in the last year, as your figures here show so dramatically. I imagine that many of the Gannett papers are still profitable, even now, but the ugly trends will inevitably catch up to even the Gannett 40 percenters.
Yes, the timing of the 3rd quarter release is interesting.
After working with the new quarter's numbers and coming up with some really preliminary numbers, I see 2008 ending at $38 billion or less -- a drop of at least 18.4% from 2007. I see 2009 between $28 billion and $32 billion.
I do not see a silver lining.
What I saw in abundance when I went shopping in the early hours of Black Friday, was lots of consumers spending money @ 5 a.m. holding the circulars they got from the newspaper. The power of advertising!
Sad to hear this over and over again. But this isn't surprising, because many newspapers truly 'deserve' this fall, since they are providing less and less independent content and news. Newspapers that showed the exit sign to tens of editors, reporters, photographers and other staff, and rely heavily on news agencies for their content, should not be surprised. I'm not going to pay for something I can get for free on Yahoo News. A newspaper should justify its existence by providing original, interesting, newsworthy contents.
Though these numbers look pretty bad for the industry and it's stockholders, at least the newspapers were successful on the political front, with a Democrat President and bigger majorities for liberals in the House and Senate.
thanks ur information
it very useful
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