NEW YORK (Jan. 14, 2009)—The array of news and information sources on the Web spells disaster for newspapers. eMarketer estimates that newspaper advertising revenues dropped 16.4% to $37.9 billion in 2008. By 2012, those revenues will tumble to $28.4 billion. That is a little more than one-half the industry’s revenue peak of $49.4 billion in 2005.
Since 2006, ad revenues have declined at a frightening speed. Another year of freefall is expected with a 15.9% drop in 2009, pulling ad revenues down to $31.9 billion. From 2010 through 2012, the rate of decline will slow but remain in negative territory. That is seven straight years of declining ad revenues, a colossal 42.5% drop.
One big problem newspapers have in this age of instant information is the lag time between story creation and distribution. Compare that with online content, which is timelier and mostly free. News organizations also compete with blogs and user-generated content sites.
The future for print media companies is online, as evidenced by the growth in Web readership of sites such as The New York Times. Small and local businesses that once depended on newspapers to get their ads in front of customers now have other more measurable options such as paid search advertising.
Even that strategy is far from a sure thing. The newspaper industry, which is pinning its hopes for the future on following readers online, is in trouble. Online ad revenues are dropping as well. eMarketer estimates online newspaper ad revenues declined by 0.4% in 2008 to $3.15 billion.
eMarketer projects online newspaper ad revenues growth to drop in 2009 by 4.7% to $3.01 billion. The recession, the dismal state of the newspaper industry and the quarterly online ad spending trends for 2008 all factor into these projections.
“The challenge is continuing to make money with the transition to online,” said Carol Krol, senior analyst and author of the report, “Newspapers in Crisis: Migrating Online.”
“Newspapers have the same transition problems that plague other traditional media such as TV, and so far they have not been able to crack the code,” Ms. Krol said.
Newspaper Websites need to increase the creation of interactive products that appeal to their readership, particular younger consumers. Newspapers that create blogs and social communities around their sites will be rewarded with increased visitor engagement and a deeper relationship with readers. Also, the use of dynamic video content and video advertising will foster user involvement and appeal to younger readers in particular.
eMarketer benchmarks its projections against Newspaper Association of America (NAA) data and factors in the recent economic downturn.
To speak to Ms. Krol about the convergence of traditional and digital media, reach out to the eMarketer media contact listed below.
About eMarketer
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Media Contact:
Samson Adepoju
Public Relations Specialist, eMarketer
Tel. 212-763-6044
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