Newspaper national advertising will surge 12% this year, topping the

By: Joe Nicholson 11.1% national ad growth in all media, ad forecast guru Robert J. Coen
predicted last week.



Coen noted, however, that there is one possible cloud on newspapers' ad
horizon: Local retail advertising in newspapers rose an anemic 0.5% in
the first quarter of this year. That troubling figure could be an
aberration, said Coen, senior vice president and forecasting director
at Universal McCann, who made his predictions at a New York
presentation to analysts and business reporters. Coen has been
forecasting ad results for more than 50 years.



In a subsequent interview with E&P, Coen didn't rule out the
possibility that the 0.5% figure was a bad sign for newspaper retail
advertising, but he emphasized the possibility it is 'a glitch.' Coen
said newspaper retail advertising may rebound in the second quarter: 'I
wouldn't be surprised if it was up 10% even, or 8%, or something like
that.'



On the other hand, Coen said newspapers may be losing local retail
share to radio or other media. He also said the switch of many local
retailers from run-of-paper ads to inserts was hurting newspaper ad
revenue since a big portion of advertiser spending on inserts goes to
produce the ads rather than to the newspapers.



'From what I can observe with my wife shopping, it's a lot easier for
her to get an insert and look at it going shopping [rather] than to try
to go through the whole paper and look at display ads,' he said, noting
that weeklies and shoppers have been getting a lot of local retail ads.



Miles Groves, a prominent newspaper economist, said the anemic 0.5%
first-quarter retail advance probably reflected retail underperformance
in newspapers since the last recession almost a decade ago. 'The retail
category is the major challenge newspapers are facing today,' said
Groves, senior vice president and chief economist of Bethesda, Md.-

based Barry Group, a newspaper marketing consulting firm. Groves said
newspapers have lost retail advertisers to radio and added, 'We need to
broaden our local retail client base.'



Media investment banker and brokerage Veronis, Suhler & Associates has
reported newspaper retail advertising growth of between 1.3% and 6% a
year since its 4.9% decline during the 1991 recession. During the same
years, newspaper national advertising has grown in the double digits
twice and classified advertising has grown in double digits three
times.



Aside from the poor retail results in the first quarter, Coen reported
that results in other newspaper ad categories looked good, with
national ads soaring 18.7% and classified ads climbing 6.7%



When local and national categories of newspaper advertising are
combined, Coen predicted newspaper advertising will grow 5% to $42.3
billion this year. This growth rate lags well behind Coen's prediction
of 9.4% growth for advertising in all media.



Putting the 5% newspaper ad growth forecast in perspective, it is
important to note it still exceeds Coen's prediction for a robust 4.8%
jump in the nation's real GDP. And to give perspective to Coen's
prediction for a 9.4% growth in advertising in all media, it should be
noted such an advance would be remarkable; the 9.4% prediction
represents two upward revisions from Coen's original predictions of
7.5% a year ago and 8.3% six months ago.



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Joe Nicholson (jnicholson@editorandpublisher.com is an associate
editor for E&P.













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