Print Ad Revenue Declines — First Time Since 2002

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Newspapers’ print advertising revenue is expected to decline 1.1 percent for the full year but stabilize to roughly flat growth in 2007, according to an industry trade group.

If the 2006 forecast holds, it will be the first full-year decline in print ad revenue since 2002, according to the Newspaper Association of America.

Next year’s forecast has plenty of gloom, including declining print ad spending from local auto dealers and job recruiters, but the data show expected improvements in other key print ad categories.

The NAA plans to publicly present its forecast Monday.

Revenue from print advertising, which makes up the bulk of overall revenue for newspaper companies, is expected to fall to $46.9 billion this year, hurt particularly by continued migration of ad dollars from big national advertisers. In 2007, the NAA expects print ad revenue to be only marginally higher.

As the latest figures show, print ad dollars have been pinched as readers have a myriad of sources for news and entertainment and marketers have growing sources for their campaigns, including online properties.

Newspapers, though, are garnering a healthy dose of online ad sales. The NAA expects revenue from online ads to grow 28.7 percent this year to $2.6 billion and to slow to a 22 percent gain in 2007.

Online ad gains haven’t been enough yet to offset stagnant print ad revenue, but the NAA expects online revenue to continue to grow as a percentage of newspapers’ overall ad revenue, up to 6.4 percent in 2007.

On the print side, the NAA expects ad revenue from big national advertisers to recover somewhat next year after an expected 5.4 percent decline this year to $7.5 billion. In recent years, major national companies like movie studios, auto makers and telecommunications companies have been leading the ad migration away from newspapers.

The newspaper forecast also shows improvement in retail advertising, or display ads for grocery chains, electronics stores and other merchants. Retail advertising is expected to increase 1 percent next year to $22.5 billion, compared with a 0.2 percent estimated increase this year. The category has been hurt as big department stores and other retailers consolidate.

For 2006, classified ad revenue is expected to decline 0.9 percent to $17.2 billion, and decline 1.3 percent next year. Classified ads for real estate have been growing at a torrid pace, which the NAA doesn’t expect to continue as the housing market shows signs of cooling off.

The NAA comprises more than 2,000 newspapers in the U.S. and Canada representing 90 percent of daily newspaper circulation.

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