Online Newspaper Ad Revenue up 35%

First-Quarter Tallies for Print Ads Flat

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NEW YORK (AdAge.com) -- Newspaper ad revenue totaled $11.1 billion in the first quarter, an essentially flat performance with a 0.3% gain compared with last year's first quarter, according to preliminary estimates released today by the Newspaper Association of America.
The NAA said that as newspaper publishers are winning on the Web, 'print advertising continues to hold its own in the face of overall softness.'
The NAA said that as newspaper publishers are winning on the Web, 'print advertising continues to hold its own in the face of overall softness.'

Web bolsters print product
The association led its report with brighter news: Ad revenue for newspapers' Web sites increased 34.9% to $613 million. That meant print and online revenue together rose 1.8% to $11.1 billion.

John F. Sturm, president-CEO, NAA, said newspapers were adapting well to a fluid media landscape. "Newspaper publishers are winning on the Web and their efforts to attract visitors, build leading Internet properties and monetize their online investments are being recognized by advertisers and consumers, as shown by a full two years' worth of outstanding consecutive gains," he said. "Meanwhile, newspaper print advertising continues to hold its own in the face of overall softness."

The NAA estimates also showed improvement in a category crucial to print papers: classified advertising. Classified revenue rose 4.7% to $3.8 billion in the first quarter, partly on the strength of a 26.3% jump in real-estate listings, according to the association.

The importance of classifieds was reiterated just yesterday by Lauren Rich Fine, the Merrill Lynch analyst, in a speech to Ohio business group Akron Roundtable.

'Still a big business'
"It still is a big business; it's very effective today," she said. "The problem is it's just not as economic a business today because, as I said, ad revenues are barely up at all this year."

And the biggest problem afflicting ad revenue growth is digital competition for classifieds, Ms. Fine said. "At the peak of classified it probably contributed about 45% of ad revenues, so let's call it about 35%-38% of total revenue but close to 70% of the profits," she said.

But, Ms. Fine added: "Classifieds belong online. They're better."

In response to the threat, industry groups have been working to emphasize and enhance local papers' Web assets. Last month, for example, the Newspaper National Network, which helps advertisers make big buys across many papers, formed an alliance with Centro, which among other things places ads across many online newspapers.
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