Newspaper ad sales head to new low: $24B
Newspaper advertising sales this year will come in at less than half the record $49.4 billion achieved as recently in 2005, according to an analysis of the year-to-date performance of the industry.
With industry revenues declining in each of the first three quarters of this year, publishers are unlikely to surpass a collective $24 billion in revenues for 2010. Here’s the math:
After slipping by 9.5% and 8.9% in the first two quarters of the year, print ad revenues took a turn for the worse in the third period, tumbling by 10.8%, according data complied by the Newspaper Association of America.
If you add the total $17.1 billion in sales reported by the industry in the first nine months of this year to the $7.3 billion in revenues achieved in the final quarter of 2010, publishers would be looking at $24.4 billion in revenues for 2011. Given the weak performance in the first part of this year, it is hard to believe newspapers will do as well in the fourth quarter of this year as they did in 2010. It won’t take much of a sales slide in Q4 for 2011 revenues to come in under $24 billion.
The last time newspaper revenues were this low was 1984, when the industry had $23.5 billion in sales. Adjusted for inflation, that sum is equal to $48.7 billion in 2010 dollars.
Although this was the year many publishers hoped the business would stabilize, sales continued to deteriorate alarmingly in almost every category in the first nine months:
:: Retail, the most significant remaining revenue category for newspapers, dropped 8.8% to $8.4 billion in the first nine months of 2011 from the same period a year ago.
:: Classified advertising, which has been battered by online competitors and prolonged weakness in the employment and the real estate markets, plunged 12.9% to $1.2 billion in the nine months.
:: National advertising fell by a bit less than 11% to $2.7 billion in the nine months.
The only bright spot was digital advertising, which climbed 8.3% over the prior year to $2.3 billion.
Unfortunately, digital advertising contributes only a slender 14.3% of publisher revenues. While this is an improvement over prior years, it must be noted that the percentage of the digital revenues is boosted as much by the decline in the denominator (total sales) as by the increase in the numerator (digital revenues).
Barring a Christmas/Hanukkah/Kwanza sales miracle in the fourth quarter, 2011 will go down in publishing history as the most disappointing for publishers since the wheels started coming off the industry in 2006.
This year was the year that many publishers believed an improving economy would halt, if not reverse, the revenue slide that commenced in the spring of 2006 and hasn’t abated since. Technically, the economy did rebound in 2011, though not from the perspective of the millions of unemployed individuals and foreclosed homeowners. But the uptick, such as it was, bypassed newspapers.
Given the disappointing way things turned out, most publishers are bracing for further deterioration in 2012 – and nipping and tucking their budgets as the new year approaches. Not a fun way to spend the holidays.
With industry revenues declining in each of the first three quarters of this year, publishers are unlikely to surpass a collective $24 billion in revenues for 2010. Here’s the math:
After slipping by 9.5% and 8.9% in the first two quarters of the year, print ad revenues took a turn for the worse in the third period, tumbling by 10.8%, according data complied by the Newspaper Association of America.
If you add the total $17.1 billion in sales reported by the industry in the first nine months of this year to the $7.3 billion in revenues achieved in the final quarter of 2010, publishers would be looking at $24.4 billion in revenues for 2011. Given the weak performance in the first part of this year, it is hard to believe newspapers will do as well in the fourth quarter of this year as they did in 2010. It won’t take much of a sales slide in Q4 for 2011 revenues to come in under $24 billion.
The last time newspaper revenues were this low was 1984, when the industry had $23.5 billion in sales. Adjusted for inflation, that sum is equal to $48.7 billion in 2010 dollars.
Although this was the year many publishers hoped the business would stabilize, sales continued to deteriorate alarmingly in almost every category in the first nine months:
:: Retail, the most significant remaining revenue category for newspapers, dropped 8.8% to $8.4 billion in the first nine months of 2011 from the same period a year ago.
:: Classified advertising, which has been battered by online competitors and prolonged weakness in the employment and the real estate markets, plunged 12.9% to $1.2 billion in the nine months.
:: National advertising fell by a bit less than 11% to $2.7 billion in the nine months.
The only bright spot was digital advertising, which climbed 8.3% over the prior year to $2.3 billion.
Unfortunately, digital advertising contributes only a slender 14.3% of publisher revenues. While this is an improvement over prior years, it must be noted that the percentage of the digital revenues is boosted as much by the decline in the denominator (total sales) as by the increase in the numerator (digital revenues).
Barring a Christmas/Hanukkah/Kwanza sales miracle in the fourth quarter, 2011 will go down in publishing history as the most disappointing for publishers since the wheels started coming off the industry in 2006.
This year was the year that many publishers believed an improving economy would halt, if not reverse, the revenue slide that commenced in the spring of 2006 and hasn’t abated since. Technically, the economy did rebound in 2011, though not from the perspective of the millions of unemployed individuals and foreclosed homeowners. But the uptick, such as it was, bypassed newspapers.
Given the disappointing way things turned out, most publishers are bracing for further deterioration in 2012 – and nipping and tucking their budgets as the new year approaches. Not a fun way to spend the holidays.
posted by Newsosaur at 5:00 AM
1 Comments:
Even more remarkable is how publishers have maintained profit margins that would still be the envy of companies in other industries. EBITDA of U.S. newspaper companies through the first nine months of 2011 is 14.9%, almost half the peak from 12 years ago. Here's INMA's take on that: http://bit.ly/sD4Ri6.
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