Ad Revenue Drops Even More Than Expected???
April 25, 2009
When publishers set their predictions for advertising revenue during the first quarter of 2009, they did so with bleak expectations. Apparently, they weren’t bleak enough.
With first quarter numbers set to be released soon, analysts are expecting a advertising drops far worse than they originally expected, some as high as 30 percent at some newspapers, with drops of over 20 percent being the norm in the industry. At the rate that advertising is dropping, budget cuts and layoffs will no longer be a viable option to offset losses, and more newspapers will turn towards bankruptcy, if not final editions.
I am curious to know which aspect is more responsible for the loss of newspaper advertising. Is it the Internet stealing advertising by offering an innovative alternative to traditional print ads? Or is it the state of the economy that is causing major advertisers like car companies to drastically reduce or even eliminate their advertising budgets? Clearly it is a combination of both, but if it is in fact the latter that is more responsible, what happens when the economy rebounds and companies are willing to place ads again? By that time, online advertising may be their only option.
