UK Regional Newspapers Fail to Plug Ad Revenue Leaks

31 August 2007

LONDON: Despite heavy investment online, the UK's regional press was unable to halt declines in advertising revenue and circulation last year, according to latest figures from the Newspaper Society.

The society's Annual Regional Press Survey shows industry-wide revenues hitting £3.87 billion ($7,78bn; €5.7bn) in 2006, with advertising and sponsorship accounting for 73% of the total. Revenues in 2005 were an estimated £4.09bn.

The report also reveals that local newspaper websites rose from 828 to 1,102 last year.

However, online advertising revenues, which grew by 18.3% in 2006, accounted for just £71m million (2.5%) of total regional press ad revenues, with print contributing 94.5%.

The number of core regional newspaper titles went up slightly to 1,303, while the number of standalone magazines and niche publications grew by 21% from 595 to 755.

Most regional newspaper groups now believe the worst of ad revenue depletion is behind them. The decline slowed during the first half of 2007 and they are keeping pace with the web.

Hypes NS president Russell Whitehair: "We know that 40m people already read a local paper in print. Growth in local newspaper websites means they now collectively represent one of the top UK online properties, attracting an estimated 20m unique users a month - which would put it above the BBC, alongside Yahoo! and within striking distance of eBay, MSN and Google."

Numis analyst Richard Hitchcock is more circumspect in his prognosis for the health of the regional press: "The internet is a useful tool for classified advertising with functionalities like searching that offer possibilities not available in print, so it is pretty relevant to the regional publishers.

"It is a question of long-term investment and there is a real doubt that they will ever replicate their position offline. I think that is highly unlikely, in fact."

Data sourced from Financial Times online; additional content by WARC staff