New Report: Small Is Still Beautiful in the Newspaper Biz

By: Jennifer Saba While big city metros are taking the lion's share of the industry's ills, community newspapers are having a different experience. Advertising revenue for community newspapers fell only 2.4% to $482 million in Q2 compared to the same period last year according to figures released from Suburban Newspapers of America (SNA) today.

SNA said the results measure hundreds of daily and weekly newspapers representing 14.5 million in circulation with annual revenues of more than $2 billion.

The SNA represents abut 2,400 daily and weekly newspapers in the U.S. and Canada.

In Q1, SNA's preliminary results revealed that advertising revenue dropped 2.7% year-over year. Compare that to Q1 result released by the Newspaper Association of America, which tracks the nation's dailies. During that period, total advertising revenue -- including print and online -- plunged 12.8% to $9.2 billion.

For 2007, total ad revenue at community newspapers inched up 0.5% while the NAA reported that for the industry, ad revenue declined 7.9% to $45.3 billion (including online revenue).

In a statement Nancy Lane, president of the SNA, explained that community newspapers' local focus attracts advertisers: "Community newspapers are doing well because they provide much needed hyper-local news and advertising. Advertisers especially at the community level are reaching an engaged audience that no other medium can effectively serve."

Another reason for better the community newspaper results: These papers are not as reliant on classified and national advertising. Typically retail advertising is the most stable category across the industry. Retail advertising fell 5% in 2007, while national was down 6.7% and classified decreased 16.5% in 2007, according the NAA.

The SNA posits that the decline in ad revenue felt at community newspapers is due more to cyclical changes rather than the secular problems -- i.e. a shift to online -- facing metros (a problem that community newspapers may eventually face).

"In almost all cases, losses are in classified advertising and real estate in particular," Lane said. "Many newspapers in the reporting group showed growth in the local and preprint categories while online revenues were up dramatically for many."