Ad Gloom Deepens at US Newspapers

23 October 2006

CHICAGO: Major US newspaper groups are facing steeply declining revenues as advertisers migrate to other media. Recent results have prompted analysts to revise forecasts from flat growth of 1.2% to a depressing slide of 1.5% for the year.

The Tribune group, which publishes the Chicago Tribune and the Los Angeles Times among others, has reported a 2% drop in publishing ad revenue during the third quarter. Retail ads were flat, while national ads - from automakers, movie studios, telcos and travel firms - slipped by 8%.

In common with other companies Tribune emphasised the growth in its online ad sales, which climbed 28% to $61 million (€48m; £32m). However, this is a drop in the ocean compared with the size of the publishing division's ad revenue.

The New York Times company reported a 4.2% drop in Q3 ad revenue, chiefly due to declines at the Boston Globe and the company's flagship paper. The Boston market faces high broadband penetration and a decline in retail advertising.

Belo, which publishes the Dallas Morning News and the Providence Journal, said ad revenue for its newspaper group fell 5.5%.

Warns Deutsche Bank analyst Paul Ginocchio: "This is uncharted territory - it will be the first time ever ad revenues are down in a nonrecessionary year."

Data sourced from Wall Street Journal Online; additional content by WARC staff