The hoped-for uptick in newspaper advertising has yet to materialize. In fact, the Newspaper Association of America’s just released final statistics for 2011 advertising revenues show a significant continuing decline in ad revenues rather than a leveling off, as some industry practitioners had hoped.
Overall advertising revenue dropped ~7% during the year. The print portion was off by more than 9%, while digital advertising revenues weren’t able to offset those losses; they rose only a modest ~7%.
Translated into dollars, newspaper industry ad revenues were just shy of $24 billion. If you add in other sources of income from things like contract printing, the total revenues for 2011 were about $35 billion for the entire industry in the United States.
Compare that figure to Google’s revenues for 2011: ~$38 billion.
That is correct. One single company – one that wasn’t even in business 15 years ago – chalked up more revenues than all of America’s 2,000+ daily and weekly newspapers put together.
Looking past the decline in print ad revenues is the sluggish pace of digital ad revenue growth, which has come nowhere close to replacing print advertising revenues. For every $1 gained in digital advertising, $7 in print advertising is lost.
A recent Project for Excellence in Journalism study by the Pew Research Center concludes that slow culture change at newspapers is partially responsible for the problem, not simply changing news consumption habits among consumers of all ages. The analysis from Pew and others contends that the prognosis remains bleak for the newspaper companies, even as the U.S. slowly climbs out of the economic doldrums.
From the vantage point of a few more years to see how consumer behaviors have evolved, it now seems quite likely that we’re headed to a two tiered structure in the newspaper industry: Strongest at the top with a few papers with truly national circulation (The Wall Street Journal, The New York Times, Washington Post, USA Today) … and also somewhat strong at the bottom with hyper-local papers that deliver news to an audience that finds it difficult to access it from other sources. (High school sports stories are always a hit.)
Everything in between? Unfortunately for them, it’s going to continue to be a major struggle. And is there even a light at the end of the tunnel?