Newspaper online advertising slows to crawl

October 13, 2008

turtle.jpgMore bad news for newspapers. We’ve all gotten used to hearing that circulation is down, print advertising is down, newspapers are cutting staff and the industry is in deep, deep trouble.

The one silver lining to all of this was the online efforts of newspapers, which were supposed to save the industry. Advertising dollars were actually growing at a rapid pace.

That was then, apparently. The New York Times reports today that online advertising growth at newspapers had slowed to a crawl.

After 17 quarters of ballooning growth, online revenue at newspaper sites is falling. In the second quarter, it was down 2.4 percent compared with last year, to $777 million, according to the Newspaper Association of America. It was the only year-over-year drop since the group began measuring online revenue in 2003.

It seems that the huge amount of display advertising has shrunk, meaning that newspapers have been forced to cut prices.

In response to the downturn, some publishers are exploring a larger, counterintuitive strategy: instead of creating more ad space, they are limiting it. “We’re going to reduce the number of ad sizes we use and the number of units,” said Christian Hendricks, the vice president for interactive media at McClatchy. “It is a case where yeah, you could probably sell another advertiser by creating another ad space,” but that could hurt the revenue over all, he said. Online revenue at McClatchy rose 12.5 percent in the second quarter; a year earlier, revenue dropped 2.2 percent.

Keep an eye on: 

  • MySpace’s MyAds goes live in a public test, or “beta” version on Monday, after about 3,400 customers tested it during the past three months (Reuters)
  • As the crisis in global markets continues, booksellers are rushing to satisfy the public’s craving for financial advice (WSJ.com)
  • British marketing budgets were revised down in the third quarter, a survey showed, to the greatest extent in the report’s nine-year history (Reuters)

(Photo: Reuters)

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[...] Newspaper online advertising slows to crawl [...]

[...] created a glut of Web advertising space. The glut forced papers to cut their ad rates. Reuters reported that some publishers reacted by restricting the Web ad space available. (Reuters also used a design [...]