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Negative Momentum: Newspaper Ad Revenues Gaining Downhill Speed (Even Online Is Declining)

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by Erick Schonfeld on September 5, 2008

Can it get any worse for the newspaper industry? The steep decline in print advertising just keeps getting steeper and, for the first time, even online ad sales have gone down. Total print ads in the U.S. were down 16 percent in the second quarter to $8.8 billion. That makes nine consecutive quarters in which "print revenues have declined at an almost continuously accelerating rate," notes Alan Mutter at Reflections of a Newsosaur. He put together the chart at left, which starkly illustrates the newspaper industry's death dive.

The newspaper industry took in $1.7 billion less in print ads during the second quarter than the year before For the first half of the year, the industry is down $3.1 billion. At this rate, there won't be an industry left by the end of next year. Of course, revenues have to stabilize at a lower level before that happens. Don't they? Rght now, we're at 1995 revenue levels.

Don't look to online ad sales to save the industry. Online ads came to only $777 million in the second quarter, which was down 2.4 percent from the year before. That's marks the first decline ever in digital revenues. The practice if bundling print and online ad sales isn't helping in this case, either. Advertisers trained to buy bundled ads are more likely to drop the entire bundle when making budget cuts.

The advertising recession is in full swing, and no segment is safe any longer.