Newspaper Ad Spending is Up! Can the Momentum Continue?

Newspaper publishers still count on print advertising to bring in the majority of their revenue every year. Digital advertising was supposed to replace print advertising and the newspaper industry was supposed to see unlimited revenue from Internet ads, but that is not happening.

There are two reasons why digital advertising is not what it was hyped to be. The first is that there are a lot of information choices for consumers on the Internet and newspapers just cannot get print advertising rates for digital advertising. The established papers are getting decent rates, but even those publications charge far less for digital advertising than they do for print.

The other problem for newspapers is that technology went from the desktop computer to the smartphone much faster than it went from the printing press to the computer. It only took a few years for digital advertising revenue to fall off the face of the planet because newspapers cannot fit monetized banners on small smartphone screens. Just when it looked like all was lost, the newspaper industry had a boost in its September 2015 print ad sales that gives some hope for the future.

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The Boost Of September

According to Media Life Magazine, print advertising spending was up 18 percent in September 2015 compared to last year and overall third-quarter print advertising revenue was up 16 percent from 2014 to 2015. For most analysts, these types of jumps represent what can be called temporary “blips on the radar screen,” but can we ignore these jumps in advertising revenue and dismiss them as only a fad and not a trend?

Where Did The Boost Come From?

Analysts say that the biggest increases in spending came from the consumer electronics and the entertainment industries. While there is no real reason given for the increase, it can be said that 2015 was a pretty good year for both industries. The constant influx of new smartphones and personal electronics along with a good year for movies at the box office and the promise of a strong Christmas movie season have helped to increase the need for spending in both industries.

Now that newspapers have seen this sort of an upward trend in their print advertising, the next question is whether or not this is actually a trend or the blip that was mentioned earlier. It may help to look at the other print industries to see if they experienced increases, and then apply the fates of those industries to what newspaper advertising could be seeing in the years to come.

Magazines Are Still Struggling

Print magazines did not see an increase in advertising revenue, which could indicate that the newspaper boost is not a permanent trend. Industries such as beauty and fashion have pulled back even further on their magazine advertising and that caused print revenue in the magazine industry to drop nine percent.

Do the problems of the print magazine industry affect the newspaper industry? They may, and they may not. When you look at the drop in magazine print advertising revenue, it tells you that national advertising is still slipping away from the print industries. Most magazines are either regional or national, and they are all fighting over a dwindling pool of print advertising revenue. But newspapers have an advantage that may help them to use this latest revenue boost as a platform for better things.

The Local Advantage Of Print Newspapers

Over the past few years, national newspapers have been bought and sold as entrepreneurs try to find ways to keep some of the country’s most iconic newspapers going. The New York Times and Wall Street Journal have seen success, but papers such as the Los Angeles Times are finding problems staying profitable.

As the large regional and national newspapers struggle for survival, many of the local newspapers in the United States are finding success. Investors such as Warren Buffett have invested heavily in local newspapers and have made almost no changes to the way the papers do business. Some locals have been forced to go from dailies to weeklies, but others have been able to leverage their local appeal into digital and print revenue that helps them to be profitable.

D.B Hebbard wrote a piece on Talking New Media in May 2015 that discussed the possibility of growth in the print newspaper advertising area. When every other industry analyst was saying that print advertising was all but dead, Hebbard disagreed and pointed to the lure of local newspapers as the reason. Hebbard argued that all local newspapers have to do is revise their rate cards to reflect the changing times and they can bring in print revenue at a pace that will exceed the appeal of the national newspapers.

The newspaper industry must have read Hebbard’s piece as well because they did adapt the way they sold print advertising and the end result was an 18 percent increase in revenue in one month. While the report did not indicate how much of that revenue was generated by smaller local newspapers, it is safe to assume that it was the local papers who helped give a kick to that number that it has needed for a very long time.

Since this increase in newspaper print advertising revenue was sustained for a full quarter, many industry analysts are taking a wait and see attitude before dismissing it. The newspaper industry could be riding a wave of success in the consumer electronics and entertainment industries that we may never see again and that would put an end to the boost in print advertising revenue.

But what if this is the first jump in a series of jumps that will become a trend? The Newspaper Association of America put out an infographic that says that 68 percent of newspaper readers between the ages of 18 and 24 read and respond to print advertising. If that is true, then we may be at the beginning of a trend instead of watching the fading light of a blip.

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