Ad Spending On Newspaper Web Sites Up, But Bleeding Continues Offline

Although online ad revenue is up 21% over last year, it doesn't offset declines in print ad spending.

The latest ad spending figures for the newspaper industry show online advertising revenue is up more than 21%, but spending for print ads continue to decline, a trade group reported.

The good news is advertisers' online spending is growing in the double digits, while print ad revenue is declining in the single digits. Nevertheless, total spending online is less than 8% of print ad revenue.

Online advertising in the third quarter reached $773 million, a rise of 21.1% over the same period a year ago, the Newspaper Association of America said. The increase reflects the 14th consecutive quarter of double-digit growth for online newspaper advertising since the NAA started tracking it in 2004. Web site advertising accounted for 7.1% of total newspaper ad spending in the quarter, compared to 5.4% a year ago.

Total ad spending in the quarter reached $10.9 billion, 7.4% more than a year ago. Print advertising, however, dropped 9% from a year ago to $10.1 billion.

While newspaper Web sites are attracting an increasing amount of ad dollars, broader economic issues are affecting newspapers the same way they are impacting other media, John F. Sturm, NAA president and chief executive, said in a statement Tuesday. "The continued fallout from declines in the housing market clearly affects real estate, recruitment, and retail advertising."

Among the major print components, classified advertising fell 17% in the quarter to $3.4 billion, retail declined 4.9% to $5.1 billion, and national advertising dropped 2.5% to $1.7 billion.

Within the classified advertising category, real estate ad revenue plummeted 24.4% to $1 billion, employee recruitment dropped 19.7% to $882.4 million, and automotive fell 17.7% to $796.6 million. All other classifieds were up 2.7% to $713.3 million.

In an attempt to boost online ad spending further, newspapers have been banding together. Yahoo, for example, launched a year ago a classified advertising network of newspapers, the Newspaper Consortium. It has tripled in size since its launch to include 21 companies, which represent almost 400 newspapers.

In addition, job site is owned by Gannett, Tribune, McClatchy, and Microsoft; and Tribune and Gannett are working on a joint venture to expand the Tribune's Metromix local entertainment site, which offers listings and reviews for bars and restaurants, and other content. If completed, the partnership would expand Metromix's format into many more U.S. markets.

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