Yesterday the NAA put out Q3 figures about ad revenues online and off. Here’s the relevant bits:
Advertising expenditures for newspaper Web sites increased by 23 percent to $638 million in the third quarter versus the same period a year ago . . . Across the first nine months of the year, newspaper Web sites experienced a 30 percent increase in online advertising spending versus the same period last year.
Print and online expenditures together totaled nearly $11.8 billion for the third quarter of 2006, a 1.5 percent decline from the same quarter a year ago. Spending for print ads in newspapers totaled more than $11.1 billion, down 2.6 percent from the same period a year ago.
Among the print categories, classified advertising fell three percent to $4.1 billion, retail ad spending was down 0.3 percent to $5.3 billion and national advertising was down by 8.3 percent, coming in at $1.7 billion.
Within the print classified category, real estate advertising climbed 10.5 percent to $1.35 billion; recruitment advertising was down 10.1 percent to $1.1 billion. Automotive was down 11.7 percent to $968 million. All other classifieds fell 0.5 percent to $694.5 million.
So online was up and print was down except for real estate, which was called out as the subhead in the release. The negative, overall print revenue numbers aren’t as striking as the losses in some individual categories: National Ad, Recruitment and Automotive.
The release focuses on online growth and puts a positive spin on the news. However, MediaPost’s article today, “Newspapers’ Online Revenue Growth Slows,” takes aim at that postive spin:
While online revenue grew 23%, that marked a slowdown from the first half of the year, when growth averaged 30% (35% in the first quarter, 33.2% in the second). Individual papers seem to reflect a similar trend. The Washington Post, for example, posted a 34% increase in online revenue in the first quarter of 2006 compared to 2005, followed by a 36% increase in the second quarter and a 24% increase in the third quarter. In total dollar terms, quarterly revenues were $22.8 million, $25.3 million, and $24.5 million, respectively.
Previously Merrill Lynch’s Lauren Fine made the somewhat incendiary remark (quoted by Editor & Publisher) that “It could take as long as 30 years for online revenue to represent at least 50% of a newspaper’s bottom line.” Online newspaper revenues are reportedly about 6% or 7% of print newspaper revenues on an industry wide basis. As has been true for awhile, ad dollars are exiting print newspapers but not being fully captured by the online side of the business.
We’ll see in Q4 and Q1 of ’07 whether print continues to decline and online continues to slow. But it’s this kind of pressure that is forcing newspapers into relationships with Google and Yahoo! — hopefully they’ll make the best of them and, especially in the case of Yahoo!, make use of the available tools, technology and distribution.
Screenwerk 