Friday, March 28, 2008

The Great Hunger

What I find interesting: web ad sales make up just 7.5% of the ad income for newspapers and seems to be peaking at that miserable level.
Newspapers, if they want to survive, need to smarten up, not dumb down. The short term looks like disaster, but I am bullish on the medium and long-term, when the "convergence plays" are broken up and the boomers in the newsroom retire. Since boomers only know how to write about themselves and their tedious lifestyles, we have two generations of potential readers who say "there's nothing in the paper". And they're right. There's nothing in the paper that speaks to them.
It's understandable that classified ads are way down. The trend in national and retail advertising suggests problems in the over-all economy. Still, newspapers have to develop a product that people want to pay for. That means delivering information that's unavailable on the net.
Fire the wine writers. Dump the columnists writing about hot flashes. Ditch the 60-year-old rock critics. Fire any editor who advocates celeb news. All that crap is available free on the 'net.
Get reporters out of the office and onto the streets. Let them get the stories you can't find online. Reporters who don't or can't break news aren't real reporters.

NAA Reveals Biggest Ad Revenue Plunge in More Than 50 Years

By Jennifer Saba

Published: March 28, 2008 12:55 PM ET

NEW YORK The newspaper industry has experienced the worst drop in advertising revenue in more than 50 years.

According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006 -- the most severe percent decline since the association started measuring advertising expenditures in 1950.

The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

Total advertising revenue in 2007 -- including online revenue -- decreased 7.9% to $45.3 billion compared to the prior year.

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.

That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

"Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms," John Sturm, president and CEO of the NAA, said in a statement.


Anonymous said...

Supposedly big cuts/buyouts coming to the Toronto Star this week
Kind of up your alley, this column from Bonokoski. Worthy of debate

Ottawa Watch said...

Bono is a superb journalist.

I hear awful news from the Ottawa Citizen, too.

David said...

Your last two paragraphs are bang on. Newspapers are the only ones who bring any depth to the table constantly. That's what they do best if they have the resources to do so.