Online Helping Newspapers - Nov. 27, 2007

Online Advertising Continues to Bolster Newspapers

Preliminary estimates from the Newspaper Association of America show that advertising expenditures for newspaper Web sites increased by 21.1 percent to $773 million in the third quarter versus the same period a year ago. This is the fourteenth consecutive quarter of double digit growth for online newspaper advertising since 2004. The
continued year-over-year gains have demonstrated the importance of newspaper Web site advertising, which now accounts for 7.1 percent of total newspaper ad spending, compared to 5.4 percent in last year's third quarter.
Total advertising expenditures at newspaper companies were $10.9 billion for the third quarter of 2007, a 7.4 percent decrease from the same period a year earlier. Spending for print ads in newspapers totaled $10.1 billion, down nine percent versus the same period a year earlier.

In the third quarter:
• Classified advertising fell 17 percent to $3.4 billion
• Retail declined 4.9 percent to $5.1 billion
• National was down 2.5 percent, coming in at $1.7 billion
Within the classified print category in the third quarter:
• Real estate advertising fell 24.4 percent to $1 billion
• Recruitment dropped 19.7 percent to $882.4 million
• Automotive was down 17.7 percent to $796.6 million
• All other classifieds were up 2.7 percent to $713.3 million
NAA President and CEO, John F. Sturm, concludes that "Newspaper Web sites continue to generate substantial revenue by offering advertisers access to the nation's most desirable group of consumers... (while) broader economic issues are (negatively) impacting... real estate, recruitment and retail advertising..."

Advertising Spending Historical Trends
National Retail Classified Print Total
Year $Mill %Change $Mill %Change $Mill %Change $Mill %change
1950 $518 11.90% $1,175 6.30% $377 9.90% $2,070 8.30%
1960 $778 0.50% $2,100 4.30% $803 8.80% $3,681 4.40%
1971 $972 9.10% $3,565 8.30% $1,630 7.20% $6,167 8.10%
1980 $1,963 10.90% $8,609 9.70% $4,222 -0.60% $14,794 6.70%
1990 $4,122 4.40% $16,652 0.90% $11,506 -3.50% $32,280 -0.30%
2000 $7,653 13.70% $21,409 2.40% $19,608 5.10% $48,670 5.10%
2001 $7,004 -8.50% $20,679 -3.40% $16,622 -15.20% $44,305 -9.00%
2002 $7,210 2.90% $20,994 1.50% $15,898 -4.30% $44,102 -0.50%
2003 $7,797 8.10% $21,341 1.70% $15,801 -0.60% $44,939 1.90%
2004 $8,083 3.70% $22,012 3.10% $16,608 5.10% $46,703 3.90%
2005 $7,910 -2.15% $22,187 0.79% $17,312 4.24% $47,408 1.51%
2006 $7,505 -5.12% $22,121 -0.30% $16,986 -1.88% $46,611 -1.68%
Source: NAA, November 2007

Online and Print Advertising Totals
Online Total Print And Online Total
Year $Mill %change $Mill %Change
2003 $1,216 $46,156
2004 $1,541 26.70% $48,244 4.50%
2005 $2,027 31.48% $49,435 2.47%
2006 $2,664 31.46% $49,275 -0.32%
Source: NAA, November 2007
Read the growth report here, or view quarterly and annual ad spending numbers in their entirety here.