Online Newspaper Advertising Sees Slowdown

    October 13, 2008

The growth in online newspaper advertising, the one area that has been a reliable source of revenue for the industry is now slowing down.

After 17 quarters of growth, online newspaper advertising fell 2.4 percent in the second quarter compared with last year, to $777 million according to the Newspaper Association of America (NAA)

It was the only year-over-year decrease since the NAA began tracking online revenue in 2003.

Online advertising over all is solid. Display advertising grew 7.6 percent in the second quarter, TNS Media Intelligence reported.

Newspaper executives say new features have attracted larger, more engaged audiences, which they hope, will lead to more advertisers The NYT reported. Unique readers in August increased 17 percent over the same period a year ago, to 69.3 million, according to Nielsen Online.

Factors fueling the decline include the economic slowdown and the continuing trend of classified advertisers moving away from papers and their Web sites.

In response to the economic slowdown some publishers are limiting the amount of ad space.

"We’re going to reduce the number of ad sizes we use and the number of units," said Christian Hendricks, the vice president for interactive media at McClatchy. "It is a case where yeah, you could probably sell another advertiser by creating another ad space," but that could hurt the overall bottom line, he said.