US newspaper revenues continue decline

20 July 2011

NEW YORK: Advertising revenues for US newspapers are continuing to fall, with the nation's largest newspaper chain announcing a fresh decline for the second quarter of 2011. 

Gannett, which publishes USA Today, 81 other daily titles and 1000 weekly newspapers, reported a quarterly decline of 2.2% for total revenues, which fell to $1.33bn for the three-month period. Ad revenues were hit still harder, falling by 6.5% across the company's portfolio as national, automotive and retail advertisers tightened their budgets.

In a conference call to the New York Times, Gardia Martore, president and CEO of Gannett explained that advertising revenue for Q3 is "getting off to the same start" as in the second quarter.

Newspapers in the US are particularly vulnerable to a downturn in media budgets because they have a relatively higher dependence on advertising than papers in other regions.

Figures from the OECD for 2010 show that advertising income equates to 57% of global newspaper revenues, with circulation accounting for the 43%.

By contrast, in the US newspapers rely on 73% of their income from advertising.

The local nature of many US newspapers could also encourage a reliance on advertising revenues as circulation growth may be limited by regionalised content.

The OECD also found that between 2007 and 2009 US newspaper revenues from online and offline circulations and advertising dropped by around 30%. In the UK, they fell 21%.

According to Warc's latest International Ad Forecast, US newspaper adspend is to fall by 5.2% to $21.26bn in 2011. This follows a 9.7% decline in 2011.

In response to the rapid growth in digital platforms, newspapers are increasingly looking for new solutions to address the decline in their revenue bases.

Gannett's digital advertising revenue increased by almost 13% in the second quarter to reach $173.4 million.

Data sourced from The New York Times and The Pew Research Center; additional content by Warc staff