And that means that newspaper advertising revenue is going to come back. US Newspapers says circulation isn’t down all that much, a reduced advertiser pool means better ROI for those that remain, and further, that former newspaper advertisers are starting to come back.
USN said, “The newspaper advertising industry’s revenue has improved and dropped and improved and dropped and improved again and dropped again. It jumped 16.3% in 1983 and then took a hit in 1991 of 6.0%. In 1997 we saw an increase of 8.5% and then just 4 years later watched newspaper ad revenue fall 9.0%. Newspaper advertising income fell 28.9% in the third quarter of 2009. Cause for concern? Probably not.”
USN discussed the impact on advertising lost to the internet on newspaper’s new reality. “The growth of internet advertising has not fared well for newspapers. This situation however, has created a prosperous environment for newspaper advertisers. Less ad revenue means that fewer advertisers are spending their advertising dollars in the newspaper. Fewer advertisers in the newspaper represent less competition for those advertising. Ultimately, less competition among advertisers results in an increased return on marketing expenditures for those still advertising in newspapers.”
USN said increasing numbers of repeat customers, and a steady flow of returning customers, bear out its guess that newspaper is ready to stage a comeback. It says that in its capacity as a newspaper agency, its business is markedly improved over Q1 2009.
RBR-TVBR observation: Online advertising has taken cash out of just about every category – but are those moving budget there getting any value back? The internet may be good for some types of messages, but we just don’t see how it delivers much value on a local basis – something that broadcasters should be explaining to wayward former clients.