Some papers see Q1 sales rise – first since 2006

After suffering through six straight years of steadily plunging advertising revenues, some newspaper publishers say they are on track to achieve year-to-year sales gains in the first quarter of 2012.

The last time newspaper ad sales grew in the first quarter was 2006, when combined industry revenues rose 0.35% from the prior year to $11.1 billion. In 2011, print and digital ad sales in the first three months were a bit under $5.6 billion, or fully 50% less than they were five years earlier.

With a month to go in this quarter, a number of publishers anecdotally reported last week at a convention in San Antonio that improved retail and employment advertising had put their sales ahead of those in 2011. The uptick was not universal, and, of course, could be derailed by any number of local, national or international events.

However, there was a notable sense of relief, if not to say cautious optimism, among several of the newspaper executives attending the combined confab of the Inland Press Association, the Local Media Association and the Southern Newspaper Publishers Association.

In a series of informal conversations, some publishers counted it as a victory that their numbers in the first two months of 2012 were equal to those of the prior year. Others reported that their sales met or surpassed conservative budgets that forecast single-digit declines between this year and last.

“It looks like the cycle finally has turned,” said an executive who could not discuss specifics of his company's sales because it is publicly traded. “People counting out newspapers have not taken into account the effect of the weak economy. It won’t take much of an improvement [in the economy] for us to see real increases in profitability after the cost-cutting we have be doing for the last several years.”

While a turn in the economy is bound to be helpful, it must be noted that every other medium has long since rebounded from the Great Recession, which technically ended by mid-2010 (though it is of little consolation to those continuing to suffer from foreclosure, unemployment and financially challenged retirement).

In the first quarter of 2011 – that’s right, a full year ago – Internet ad sales soared 14.6%, television ad sales advanced 5.3%, magazine ad sales rose 4.5% and radio ad sales gained 1.3%, according to Kantar Media. In the same period, newspaper sales fell 7.2%, according to the Newspaper Association of America.

While publishers have been perfecting the fine art of doing more with less (or sometimes less with less), vigorous competitors like Groupon and Yelp have been filling their coffers at the IPO window to pursue ever more local ad dollars. And that’s not to mention such big kahunas as Google and Facebook, the latter of which will add tens of billions to its marketing war chest when it goes public in the very near future.

You can't begrudge beleaguered publishers for wanting to pop a cork if they happen to have a positive first quarter. In light of the gathering competitive assault, however, they would be wise to choose inexpensive vintages and put the balance of their extra profits into beefing up their digital offerings.