If you take a closer at the Northwestern study from last segment, what you’ll notice is that for the mid-circulation papers about 20% of them, 10.6 out of 52.9 pages were completely devoted to advertising. In the Sunday edition that number rose to close to 25%, 22.5 out of 101.2 pages. More than anything else, it’s advertising that funds the continued existence of the paper, and as the economy slumps and more advertisers move online, this source of revenue is drying up.
According to a study by the Newspaper Association of America, the last three years have seen marked decreases in advertising expenditures across the board, a 5.1% drop in 2006, a 6.7% drop in 2007 and a 14.4% drop in 2008.
Some (not all) of those advertising dollars have moved online. If this trend continues, it has been predicted that Internet advertising will exceed print advertising sometime in the early 2020s. Though that assumes that print media will still be around in 2023 (the date that the intersection is predicted to occur). It seems more likely that we will see a fundamental shift as print newspapers shut down and the vehicles used to deliver advertising online improve.
All the speculation in the world doesn’t make up for the fact that newspapers are bleeding money at an unprecedented scale. While overall circulation is up (thanks to online viewership), the advertising value of each additional reader is dropping. The question is, how many more years can newspapers maintain the print side of their business before these losses cripple them.
The drop in advertising is not only a problem in the U.S., this clip from March of 2009 is a look at Australia and the effect that decreasing advertising revenue will have on print journalism there.