Online Advertising Specter Haunts US Newspapers

12 July 2007

NEW YORK: It will come as no surprise to those in the US newspaper industry that research shows it to be suffering more than other media from the migration of ads from the printed to the cyber page.

Wachovia Equity Research's latest report looked at 100 leading US advertisers to study the move away from traditional media to the web.

It looked, specifically, at 55 advertisers in the automotive, retail, telecoms, financial services, general services, media and tech/internet categories.

It found that only financial services increased spend in newspapers. The seven categories collectively decreased adspend by 14.3% in newspapers and increased it by 17.8% online during 2006.

Television, although also perceived as one of the 'tradional' media, saw its share of spend by the seven categories rise 4.4%. Adspend in other measured media slipped 1.1%.

Telcos were shown to have shifted most from newspapers. In 2005, the top marketers in the category spent 31.6% of their ad budgets in newspapers, compared with 24% last year.

The automotive category also lowered its newspaper spend significantly, from 9.2% of its ad budget in 2005 to 4.6% last year. Retail experienced less than a 2% drop from 29.8% to 28%.

According to Wachovia, online advertising would have to grow 15% per year over the next decade to catch up with the newspaper adspend, currently around $35 billion (€25bn; £17bn).

Data sourced from Adweek (USA); additional content by WARC staff