US newspaper advertising market suffers further decline

NEW YORK - Adspend in US newspapers was down almost 9% in the second quarter, as print sales fall and troubles in the housing market hit the economy.

Total adspend at US newspaper companies, including the New York Times Company and the Tribune Company, was $11.3bn for the second quarter of 2007, an 8.6% fall on the same period last year.

Spending for print ads in newspapers totalled $10.5bn, down 10.2% against the same period a year earlier.

The fall was the fourth quarterly decline of total ad revenue in a row. It follows a 4.8% fall in the first quarter, and declines of 1.5% and 2.2% in the third and fourth quarters of 2006.

Classified advertising was hardest hit, falling by 16.4% to $3.4bn, as internet advertising continues to affect the market. Trouble in the US housing market was reflected, as real estate advertising dropped 21%, followed by an 18.5% in the recruitment ad market and a 19% drop in automotive ads.

The dismal figures come at a time of unprecedented change in the newspaper market, following Rupert Murdoch's capture of The Wall Street Journal-owner Dow Jones, and Chicago real estate billionaire Sam Zell's purchase of the Tribune Company, which owns Chicago Tribune and the Los Angeles Times, in a deal worth $8.2bn.

John Sturm, Newspaper Association of America president and chief executive, said: "Cyclical swings in the US economy, as well as structural changes in the businesses of major advertisers continue to affect print advertising revenue. Yet, newspaper companies are continuing to take aggressive measures to prepare for the future as they contend with a challenging economic environment that is having an impact not only on newspaper advertising, but revenue for other media as well."

In July, the New York Times Company reported that ad revenues across the group, which also includes the Boston Globe, fell 6.5% since 2006. However, internet ad revenues have risen 22% since in the last year.

Online advertising continued to grow despite the overall fall in money being spent with newspaper groups. Online adspend was up 19.3% to $796m in the second quarter, according to preliminary estimates from the NAA.

Online adspend for newspapers now accounts for seven percent of total newspaper adspend. This is up almost 2% on last year when online adspend represented 5.4%.

Strum said: "As newspapers transform themselves into multimedia platforms offering a diverse portfolio of print and digital products, publishers continue to deliver the award-winning, innovative content that makes newspapers the most trusted source of news and information."

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