Fall in WSJ Ads Casts Doubt on Wider Market

10 September 2004

Hopes that US newspaper adspend has begun a long-term upturn could be premature, as new figures from Wall Street Journal owner Dow Jones suggest it might yet be too early to break out the Champagne.

Advertising volumes at its flagship title are expected to slide in the current quarter, particularly in the communications and software, travel, retail, technology and business-to-business sectors. August alone saw the US edition dip 0.1%, within which the technology market plunged 26.4%.

"Much of the technology sector has pulled back its advertising, particularly the software companies" opined investment research firm Fulcrum Global Partners' Edward Atorino, adding "and the travel sector is in turmoil."

According to media network Zenith Optimedia, newspaper adspend has only just emerged from years of slowdown, after which it rose slightly in 2003 to $46.2 billion (€37.8bn; £25.8bn) from $45.3bn in 2002.

Although currently limited to the Journal, analysts are concerned that the latest decline in adspend may spread to the rest of the market. Says Atorino "These are categories that represent fairly broad sectors of the economy. It could mean bad news for some of the big city newspapers like the New York Times and the Los Angeles Times."

Dow Jones accordingly cut its earnings forecast for the third quarter and saw shares slide by 3%.

Data sourced from: MediaGuardian.co.uk; additional content by WARC staff