Sunday, February 26, 2012

Newspaper Ad Revenues Fall to 60-Yr. Low in 2011

The chart above displays total annual print newspaper advertising revenue (for the categories national, retail and classified) based on actual annual data from 1950 to 2010, and estimated annual revenue for 2011 using quarterly data through the third quarter, from the Newspaper Association of America.  The advertising revenues have been adjusted for inflation, and appear in the chart as millions of constant 2011 dollars.  Estimated revenues of $20.7 billion in 2011 will be the lowest annual  amount spent on newspaper advertising since $19.5 billion in 1951, exactly 60 years ago.

The decline in newspaper ad revenues to a 60-year low is amazing by itself, but the sharp decline in recent years is pretty stunning.  Last year's ad revenues of about $21 billion were less than half of the $46 billion spent just four years ago in 2007, and less than one-third of the $64 billion spent in 2000.

And even when online advertising is added to the print ads, the combined total spending for print and online advertising in 2011 will still only be about $22.6 billion, just slightly more than  the $22.5 billion spent on print advertising in 1954.

Economic Lesson: It's another one of those huge Schumpeterian gales of creative destruction.  

Update: Here's another perspective: It took 50 years to go from about $20 billion in annual newspaper ad revenue in 1950 (adjusted for inflation) to $63.5 billion in 2000, and then only 11 years to go from $63.5 billion back to about $20 billion in 2011.

HT: Sprewell


At 2/26/2012 8:45 PM, Blogger W.C. Varones said...

Couldn't have happened to a nicer bunch of Obama propagandists.

At 2/26/2012 8:53 PM, Blogger juandos said...

"Couldn't have happened to a nicer bunch of Obama propagandists"...

I second varones's comment...

At 2/26/2012 9:11 PM, Blogger Benjamin Cole said...

A lot of people are going top find out one day that their local and state governments have been ripping them off--that is, you will find out if you are lucky.

No one is left to cover city hall or county supes.

BTW, most local papers were conservative---needed advertisers.

The PInk State Empire (GOP-Land) is now safe and open for business.

At 2/26/2012 9:17 PM, Anonymous Anonymous said...

Wow, that chart is particularly stunning once you adjust for inflation. It just goes to show what happens when protected industries are faced with real competition for the first time: they fail hard. Newspaper companies used to be highly profitable for decades, because they'd all get in price wars till only one or two were left standing, who would then collect monopoly rents for years. Those monopolies left them fat but stagnant, too lazy to find good talent. Why bother, when the money rolls in anyway, once you're a one newspaper town? Along comes the new tech of the internet and they've become so fat and complacent, that they're completely incapable of surviving. This is what will happen to video-related businesses, ie TV/movies, education, medicine and government next, in that order. They will all face the buzzsaw of internet-based competition soon, and they're all spectacularly incapable of competing, because they've managed to sit fat and lazy on their protected businesses so far.

At 2/26/2012 9:24 PM, Anonymous Anonymous said...

The man to blame for this is Craig Newmark. Newspaper ad revenue fell off the cliff when Craigslist really hit its stride.

At 2/26/2012 9:28 PM, Blogger Mark J. Perry said...

Denbeste: That's correct. If you look at the breakdown in ad revenue sources at the links provided, you can see that the biggest drop in newspaper ad revenue has been for "Classifieds."

At 2/26/2012 9:45 PM, Blogger Andy Freeman said...

> A lot of people are going top find out one day that their local and state governments have been ripping them off--that is, you will find out if you are lucky.

Actually, we already knew that. And newspapers have helped with that rip-off.

Maybe we'll have better luck stopping those rip-offs without newspapers providing cover and encouragment to the thieves.

At 2/26/2012 9:47 PM, Blogger Dumpsterjuice said...

A lot of it is simple economics. I am a small business owner and I get very little response out of advertising in a newspaper. I am politically conservative but completely leave politics out of business, no sense in alienating some of your customer base.

At 2/26/2012 9:59 PM, Blogger ed said...

Another issue is that many newspapers have left the local news by the wayside and have instead filled their pages with state or national news garnered from the wire services. This is cheaper than actually hiring competent reporters to work the local scene for anything other than Lifestyle nonsense.

But the reality is that the only niche that newspapers really can fill are local news issues. If I want to keep up with state, national or international news I fire up the web and look online. But if I want local news I'd usually turn to the local newspaper. But now that option is rapidly disappearing.

And since newspapers are abandoning the local news that is often being picked up by local bloggers on a more citizens news sort of way. Not organized, not professional and probably not nearly as effective when dealing with situations involving the abuse of power.

But that's the way it seems to be playing out.

At 2/26/2012 10:08 PM, Blogger Fred said...

I'm on the Demoracitc Party email list, who needs a newspaper?

At 2/26/2012 10:11 PM, Anonymous Anonymous said...

Now go back and overlay that with a graph of Journalism graduates from Ivy League schools.

Stephen is right: Craigslist has killed the classifieds, and those were the cash cow. None the less, people would buy newspapers if there were news in them, rather than propaganda from people trying to Make A Difference For Social Justice, as they were taught in J-School.

At 2/26/2012 10:26 PM, Blogger Unknown said...

To add to the chorus-- I always thought it amazing that my local paper (The Arizona Republic) was so blatantly partisan when Bush was president. I don't know if I represent a significant section of potential customers, but I vowed then to NEVER purchase one of their papers again. And I haven't.

I would rather flush my money down the toilet than give a cent to those manipulative bastards.

At 2/26/2012 11:11 PM, Blogger Audi said...

People are revolting against the left-wing socialist obamamalkjslkjs lapdog media. Good for them. They should throw out the leftists in charge and change the focus of the paper, maybe then they will win back readers and advertisers. I have been thinking that we need to list the advertisers on the liberal news shows and begin boycotting them until they pull the advertising.

At 2/27/2012 12:25 AM, Blogger JorgXMcKie said...

From the time I started delivering newspapers in 1957 until two years ago I read at least one newspaper allthe way thru every single day, many times to papers, and occasionally more than two.

Then, a couple of years ago the papers here [Detroit Free Press and News] went to a Th-F-Su delivery scheme. I now find that they sometimes pile up for weeks before I even look at them.

I don't miss them. Perhaps I would if there was anything in them worth reading past the comics page. The sports page is so full of 'homer' writing it isn't even worth reading.

They're only reaping what they sowed.

At 2/27/2012 1:21 AM, Blogger Marvel Goose said...

My local paper hires young kids who can barely write and barely live on the pittance they make. We're also seeing more citizen journalism and it measures up well to the low baseline that has been set by the paper.

At 2/27/2012 1:41 AM, Blogger Billy Hollis said...

"The man to blame for this is Craig Newmark."

Yes, but Fandango, etc., did their part too. Movie advertising used to be a mainstay of newspaper revenue (20-25% for many papers) because it was the only practical way to find out what movies were playing where.

Now, an under-25 is about as likely to buy a newspaper to find out about movies as he is to own a Victrola to play his music. Ad revenue from theaters has decreased accordingly.

At 2/27/2012 1:55 AM, Blogger kmg said...

Just like the demise of paper books happened pretty fast... unsustainable old business might seem in decent shape for a long time, but when it gets whacked, it gets whacked fast.

Expect the same to happen to healthcare, education, and organized feminism.

At 2/27/2012 1:58 AM, Blogger kmg said...

Despite this (the same is happening to TV ads).....

......the power of the left-wing media is not decreasing (as evidenced by the fact that Obama's approval is still in the mid-high 40s, rather than the 20s where it should be).

Since 2003, I keep hearing that the new media would decentralize power and break the leftist bias. That has not happened.

At 2/27/2012 1:59 AM, Blogger kmg said...

It just goes to show what happens when protected industries are faced with real competition for the first time: they fail hard.

Thank You!!!!

Protectionism and political cronyism might delay natural market forces, but that just means the eventual correction is swifter and more brutal.

At 2/27/2012 2:06 AM, Blogger kmg said...

Perhaps more trees are now being saved, as a bonus?

I once calculated that before the Internet started to dent paper subscriptions, newspapers amounted to 100,000 tons/day of paper consumed nationwide.

Sure, this was low-grade paper that had already been recycled once or twice after a high-grade life, but still........100,000 tons per day!!

And that is just the US.

At 2/27/2012 2:53 AM, Blogger Cabodog said...

It's not just the newsprint being saved, but the petroleum used to manufacture and transport it.

At 2/27/2012 3:01 AM, Blogger Mathview said...

This plot of newspaper ad revenue vs. time is spectacular. We observe that the trend extrapolates to zero ad revenue in 2022 or so. Here in Palm Springs CA our local paper, The Desert Sun, seems to have moved itself to a website format. I suppose ad revenue from newspaper's websites is not included in the plotted data. Presumably, newspaper website ad revenue is increasing.

At 2/27/2012 3:10 AM, Blogger Unknown said...

Seems quite appropriate considering the low quality content found in newspapers today compared to that available online in the blogs experts.

At 2/27/2012 3:13 AM, Blogger SteveH said...

No time for mainstream friend
No time for renewals you send
Mediums change and so did I
You need not wonder why
You need not wonder why
There’s no Tme left for you
No time left for you

At 2/27/2012 3:39 AM, Blogger T J Sawyer said...

It seems like a classic case of newspapers not understanding what business they were in.

They were the sales agents for everything from boats and cars to puppies. They were also the providers of schedules for movies, sports events, parades not to mention department store sales etc. Why didn't they see the Internet as a better way to accomplish their mission?

For many years, the Minneapolis newspaper actually provided movie schedules sorted by theater ownership. Just what I needed - "hey, I think I'll check on what's playing at all the General Cinema owned theaters in a 400 square mile area!" I suppose the newspaper management is still wondering, "Now, why would those rubes think looking up movies by title was a useful idea?"

At 2/27/2012 4:18 AM, Blogger Unknown said...


1) The internet was around for years before the collapse. The internet killed employment ads early on but ad revenue was still increasing at that time. Smart investors had plenty of time to bail out. I wonder who those smart investors were? And the unsmart?

2) Print newspapers were key to the environmental movement taking off in the 1980s. Newspapers were originally huge targets for environmentalists (newsprint filling landfills) early on. Taxes and regulations were proposed. Then the print media became HUGE supporters of environmental groups and those groups, funny how that happened, left the newspapers alone from then on and newsprint (disposal) taxes were never implemented. The environmental movement will weaken over future decades as their print cheerleaders lose influence.

3) Newspapers were the most politically correct organizations around, huge supporters of feminism, affirmative action and environmentalism. Perhaps their energies could have been spent more productively elsewhere.

At 2/27/2012 9:14 AM, Blogger gregory said...

great news

convincing people to buy crap they don't need while reading junk they don't need is abominable behavior.

good riddance.

At 2/27/2012 9:20 AM, Blogger Hans said...

This comment has been removed by the author.

At 2/27/2012 9:23 AM, Blogger Hans said...

Who will die first, the Yellow Pages or newspapers? Please, place your bets.

"BTW, most local papers were conservative---needed advertisers."


SteveH, a Grammy performance!

warlocketx, excellent point and the main reason why I stop supporting them...

Do not forget the contributions by the labor gangs!

I was a contract classified advertiser with the Mpls Red Star in the 90's...I would receive annual rate increases (3 to 5%, year in, year out...

I recently called, to place an ad under the real estate contracts and was told it would cost $18 per line; a four line add for a week would cost over $500!!

I hope I live long enough, to see the printing presses wine up at the Smithsonian!

At 2/27/2012 9:35 AM, Anonymous Anonymous said...

Newspapers have been declining for decades. Mergers and buyouts have resulted in large losses in reporters and editorial staff. As Benjamin pointed out, this means that there isn't anyone left to cover local politics. And as someone who ran for election in 2008 (for a smaller local office), I came across that myself. You won't realize just how badly the media in the US has decayed until they write about yourself and get it all wrong.

At 2/27/2012 9:57 AM, Blogger morganovich said...

"You won't realize just how badly the media in the US has decayed until they write about yourself and get it all wrong."

you think that's new?

it's been like that since forever, especially around DC.

At 2/27/2012 10:08 AM, Blogger GS said...

It makes me laugh when people start claiming that newspapers are "liberal" - I worked in the industry for many years, and I've never seen a "liberal" newsroom - ever.

Instead, you see a newsroom full of people who live in fear of the editor, who lives in fear of the publisher, who lives in fear of pissing off the conservative business owners who buy ads.

Any story that had the potential to upset the conservatives was either changed in a way that turned it into a fluff piece, or was deleted completely from the system.

The only propaganda I've ever seen comes from politicians tricking everyone into believing that newspapers were liberal.

At 2/27/2012 10:18 AM, Blogger Seth said...

Google Reader

At 2/27/2012 10:20 AM, Blogger morganovich said...


you might want to consider your own bias. if you (and i don't know you at all so i am speculating) are more liberal than most, then your idea of "liberal" may be different than the mainstream.

you might also want to wonder why, if they are so conservative, they live in such fear of upsetting advertisers.

i think you would have a very difficult time characterizing the NYT as anything other than extremely liberal. people call it "pravda on the hudson" for a reason.

sure, there are some conservative papers as well, but the preponderance seem to go the other way.

i'd suggest you take a look at the UCLA (itself a very liberal school) work on media bias.

every time someone tries to do a large, data based study, the bias comes back overwhelmingly liberal.

At 2/27/2012 10:20 AM, Blogger Tucanae Services said...


Your local newspaper has not been covering city hall as a regular beat for at least a decade if not more. There is a reason that they are called the drive-by media. No reporter is assigned a regular beat any longer.

At 2/27/2012 11:08 AM, Blogger Paul said...


"you might want to consider your own bias."

Exactly what I thought when I read his comment.

At 2/27/2012 11:15 AM, Blogger Squid said...

Cover City Hall? Hell, most of the time, the newspaper publisher is in cahoots with the crooks in City Hall. It's not about covering them; it's about covering for them.

It's hard to get elected if you don't have friends in local media. Therefore, most elected officials are friends with the local media. Q.E.D.

The newspapers dug their own graves. It's kind of fun watching them fall into their holes.

At 2/27/2012 11:38 AM, Blogger Paul said...

"BTW, most local papers were conservative---needed advertisers."

Naturally, not a shred of evidence from Benji to support this claim.

At 2/27/2012 11:54 AM, Blogger Buddy R Pacifico said...

The Seattle Post-Intelligencer (PI) converted to web only a couple of years ago.

The is very interesting, in that it combines local blogging, reporters, forums and a few feature writers.

There are zero classfieds but a lot of advertising ranging from pop-ups to streaming video.

I am not sure if the Hearst Corporation(owner) is making money on the PI, but it certainly a corporate laboratory for possible future endeavors in moving away from print.

At 2/27/2012 1:08 PM, Blogger juandos said...

"Any story that had the potential to upset the conservatives was either changed in a way that turned it into a fluff piece, or was deleted completely from the system"...

On what planet was this happening on gs?

At 2/27/2012 1:09 PM, Blogger juandos said...

This comment has been removed by the author.

At 2/27/2012 3:07 PM, Blogger RAS743 said...

GS, I don't know what newspaper planet you worked on, but I was in the business for 15 years and what I saw was overwhelmingly liberal. You're like my political science professor friend who reads the NYT every day and can't for the life of him admit the truth of bias I repeatedly bring to his attention. "There are none so blind as those who will not see."

At 2/27/2012 9:43 PM, Blogger Ian Random said...

The tablet is the final nail. For $50-$100, you have something convenient for the porcelain reading room. I have no sympathy for newspapers, they all seem to parrot the WaPoNyt perspective. The local talk show host in 5 minutes will give you plenty of information to look-up online. Little trick for listen to any talk show, when the repetitive bi-hourly news comes on, just switch to NPR for a good laugh at the clueless twits.

At 2/28/2012 5:50 PM, Blogger Hydra said...

Why bother, when the money rolls in anyway, once you're a one newspaper town?

Not all nespapers are liberal.

My town had a business oriented paper and a conservationist oriented newspaper.

After a long string of letters to the editor about what was wrong with the county's conservationist / anti-business policies, the conservationist newspaper bought the business newspaper and shut it down.

It will be interesting to see what happens with the nonprofessional and [largely inaccurate] blogs will evolve to, particularly conserning abuse of power.

Their problem is that there are so many of them, anyone can pick one that suits their point of view, and no consensus ever develops.

At 2/28/2012 5:56 PM, Blogger Hydra said...

"Our results show a strong liberal bias. All of the news outlets except Fox News’ Special Report and the Washington Times received a score to the left of the average member of Congress. "

At 2/28/2012 6:02 PM, Blogger Hydra said...

"Groeling found that, with varying degrees of statistical significance, CBS, NBC and ABC showed what Groeling calls a pro-Democrat bias. For instance, CBS was 35 percent less likely to report a five-point drop in approval for Bill Clinton than a similar rise in approval and was 33 percent more likely to report a five-point drop than a rise for George W. Bush.

Meanwhile FOX News showed a statistically significant pro-Republican bias in the most controlled of the three models Groeling tested: its Special Report program was 67 percent less likely to report a rise in approval for Clinton than a decrease and 36 percent more likely to report the increase rather than the decrease for Bush."

Apparently, neither flavor of the news is interested in the truth.

Both sides woud rather have a wrong answer, that suits their agenda, than a correct answer,yet both sides will claim they are interested in what is best.

At 2/28/2012 6:03 PM, Blogger Hydra said...

Previous quote was from:

At 2/28/2012 6:48 PM, Blogger Hydra said...

If both sides are prone to this behavior, then the quantity must be a market issue.

Nothing prevents conservatives from opening news outlets, unless there is no market, or less market for what they have to say. This would seem to be born out by the kind of schlocky advertisers fox seems to get.

At 2/29/2012 5:07 PM, Blogger duresport said...

My goodness, your commenters are delusional.

If you think politics have anything -- anything at all -- to do with the drop in print ad revenue, you're kidding yourself. Or you're being misled by some false political prophet who wants you to think that way.

It's simple business. Online advertising is cheaper and more easily targeted. (It's helping newspapers recoup some of this lost income, but not enough of it.) We also have hundreds of TV channels now. And yes, we have Craigslist.

But by all means -- take whatever comfort you like in thinking it's all a response to a liberal media conspiracy. No one writes intelligently about media bias, anyway (that includes Groseclose, who arbitrarily defines "left" and "right" as isolated points that ignore the rest of the world and the rest of world history). The truth is that whatever faults you find in your local paper are likely to get worse, not better, as resources dry up.

At 2/29/2012 10:23 PM, Anonymous Anonymous said...

Perhaps I'm reading this wrong, but total print ad revenue in 2000 was $48.6 billion not $64 billion.

At 2/29/2012 10:34 PM, Anonymous Anonymous said...

Whoops - adjusted for inflation.

At 3/01/2012 1:06 PM, Blogger Virginia Postrel said...

In addition to the effects of Craigslist, Fandango, and other online competitors, there was also a great deal of consolidation in the department store industry, which reduced the amount of display advertising.

At 3/12/2012 3:32 PM, Blogger Thomas Hartwell said...

All you lamenting the death of the city newspaper are crowing the loss of competent civil and government watchdog reporting. Newspapers, as an institution, are one of the public's best resources. As businesses, they could pay reporters to sit through board meetings, filtering out the rote business of the day for proposals and resolutions they knew would impact regular folks. As a government watchdog, they had the PROTECTION of strong legal teams and the ear of the public in combating unpopular, unjust or unscrupulous political forces. So what has Fox News done for you lately?

At 3/15/2012 4:29 PM, Blogger ed said...

"All you lamenting the death of the city newspaper are crowing the loss of competent civil and government watchdog reporting. ..."

If that were true then I truly would lament the loss of newspapers. But the reality is that newspapers rare if at all now provide those functions. Most newspapers have become little more than shills for politics and, because of political filtering in employing new reporters, most reporters are partisan shills for Democrats. You can easily see this in almost any newspaper article that portrays a politician caught in bad conduct. Republicans have their party affiliation posted prominently. Democrats on the other hand either do not have their party affiliation posted at all or at best 11 paragraphs into the story. Or even in a completely different section or, more amusingly, are associated with the wrong party altogether.

The simple fact is that most local newspapers regurgitate what they get off the newswires, blogs or news aggregation in order to fill out the paper. Local news that actually require reporters are often given short shrift and have been cut to the bone.

The reality of it all is this: if local newspapers were really that valuable to the public then that very same public would pay for it. That the public does not see that value in what is being offered should clue in newspapers that their business model is not a sustainable one.


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