By: Kate Schlentz
Submitted: 2010-04-21 17:38:28 | Word Count: 634
The newspaper advertising industry's income has been on a rollercoaster ride of ups and downs over the years. It jumped over 15% in 1983 and then took a hit in 1991 of 6.0%. In 1997 we saw a rise of 8.5% and then just 4 years later observed newspaper ad earnings fall 9.0%. Newspaper advertising profits fell over 25% in the 3rd quarter of 2009. Cause for worry? Probably not.
The cliche "history repeats itself" is not lost in translation in this condition. We have been here before. Newspaper advertising revenue has never experienced the amount of loss we have seen in recent years, however there are outside components playing into this drop that are new to the industry. For instance, in the past 2 years online advertising has grown in acceptance and can be held at least moderately responsible for the third quarter of 2009 being the 8th consecutive quarter of double digit decline in newspaper ad profit.
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Marketing campaigns have shifted to contain more and more online advertising that promotes advertising to huge perceived audiences. An enormous number of websites out there offer some type of advertising, and the ones that don’t may have missed an opportunity. New advertising vehicles can excite the masses and create a bandwagon effect. Internet and other “interactive” advertising is no exception. The wide accessibility of internet advertising translates into fierce competition (to put it mildly). The content of many websites can appear less important to the masses of advertising that cover many pages.
The expansion of online advertising has not fared well for newspapers. The loss of former newspaper advertisers to online advertising has created a flourishing situation for the remaining newspaper advertisers. A lesser amount of ad sales revenue means that fewer advertisers are spending their advertising money in the newspaper. A smaller number of advertisers in the newspaper signify less competition for those advertising. At the end of the day, a lesser amount of competition among advertisers results in an increased return on marketing expenditures for those still advertising in newspapers.
Newspaper circulation numbers are down an average of 7.41% over the past 2 years. People are still reading their newspapers, despite what has been reported. Especially when you take into account that on a nationwide level we are talking about circulations in the high 40 millions.
The bottom line is that newspaper advertisers are facing far less competition today. The product, however, has remained more or less the same. Consequentially, advertisers are getting additional results from their newspaper ads.
While it remains undecided that this trend will carry on, it seems increasingly likely that the newspaper industry has seen its darkest hour in advertising profit. The first signs of a rebound are clear. US Newspapers, a full service advertising agency that specializes in newspaper advertising, reports that they are expecting an increase in advertising earnings of 68% this quarter (compared to the earliest quarter of 2009). The companies’ ceo, Jim Trammel explains, “We have seen a large increase in new business over the last couple months. Past clients have been returning on a regular basis as well. We know that the ads are doing well, because re-orders are consistent. If this is any indication of the industry as a whole, and I believe it is, it looks as though things are looking up for newspapers.”
Author Resource:-
US Newspapers is a newspaper advertising agency representing more than 6,000 community newspapers in the United States. Since their inception in 1998, US Newspapers has offered clients extremely valuable classified advertising & display advertising products at highly discounted prices. Their Community Target Program™ makes mass print advertising simple, at a price that makes sense. For more information, visit www.usnewspapers.com.
