Newspaper circulation woes offset by Internet gains

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Two studies released within a week of each other in November are likely to add to the identity crisis now gripping the newspaper industry regarding its future.

The first, released by the Newspaper Association of America, showed an all-time high in both the number and percentage of Internet users visiting newspaper Web sites based on figures from Nielsen//Net-Ratings. According to the study, more than 47 million people visited newspaper Web sites in September, up 16% from a year earlier and the most in any month since NAA began tracking online usage in January 2004. (The spike was most likely attributable, in part, to interest in coverage of hurricanes Katrina and Rita, the NAA said.)

The second study tempered the good news of the first: Average weekday circulation for 18 of the top 20 newspapers dropped a combined 2.6% from March to September of this year—the largest six-month decline since 1991, according to the latest FAS-FAX report from the Audit Bureau of Circulations. Circulation for the only two newspapers in positive territory—The New York Times and The (New Jersey) Star Ledger—rose less than 1%. Sunday circulation fell 3% for the top 20 newspapers combined.

The trends in newspaper readership mirror the increasing migration of ad dollars to the Web. A separate study from the NAA released last month showed that while spending for print ads in newspapers totaled $11.4 billion for the third quarter, up 2% compared with the same period last year, ad spending online rose 27% over the same period to $519 million. For the first nine months of the year, total print and online ad spending hit $35 billion, a 2.9% increase from the same period in 2004.

As the print newspaper business model undergoes upheaval—and advertisers move their budgets online—the onus is on newspaper publishers to change the conversation they have with marketers from circulation to total audience measurement.

"We need to build more awareness and talk more about audience reach and not just the number of newspapers sold," said Mort Goldstrom, VP-advertising for the NAA. "Newspapers bring a built-in trust to their Web sites, and if you're an advertiser … you want to be associated with that trust."

Goldstrom added: "We need to play more offense with our advertisers."

To that end, the NAA earlier this month announced the formation of an Executive Advisory Council, made up of senior executives from major marketers and ad agencies. The council was created to work closely with the NAA to continue driving measurement techniques that count newspapers' total reach and audience.

"Newspapers can no longer live and breathe in one environment, and need to offer [advertisers] different platforms," said Randy Bennett, VP-audience development at the NAA.

Penny Abernathy, senior VP-international and development at Dow Jones & Co., said the challenge for newspaper publishers is "to make the mediums more specialized because people read newspapers and the Web for very different reasons. You need print to build the brand while the Web can close the deal" with potential subscribers and advertisers.

Abernathy said smart publishers are able to get print and online to complement each other. "Each medium has to decide how it remains essential to the reader, which is fundamental to remaining essential to advertisers," she said.

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