Newspaper Ad Revenues Dropping Fast

I don't post too much about newspapers here, but they are a large (though shrinking) and important part of the local advertising ecosystem. I've argued for a while that, while yellow pages companies are in a tough position, newspapers are even worse off. Why is that? Because they face a lot more competition and on different factors compared to YPs. Any local blogger can cover local news (sometimes better than the big papers, especially when you're talking about a neighborhood or smaller area). They can go deeper on topics, have a better understanding of the day-to-day life in an area and, most importantly, they can be more timely with their news delivery. While newspapers publish once a day (and their online schedules are not that much more frequent), bloggers publish anytime. And via blog readers and other notification channels, interested people can know the news as soon as it happens. While this will impact other local players, like radio and TV, the biggest impact is in the newspaper industry. Yellow Pages obviously face significantly new media competition as well, but it's not as likely that one person in their house will provide the same competition for YPs that they provide for newspapers.

So what's the point of all this? According to the Newspaper Association of America (via Techcrunch), newspaper advertising revenues have been dropping off a cliff. Not only that, but their Internet revenues are decreasing as well. Most people I know think we're in a recession and advertising is bound to drop off as a whole. But it definitely looks like newspapers are taking the brunt of it (though the YPs are not exactly feeling good either). Classified ads, one of the big revenue areas for newspapers, have been eaten away for a while now, by Craigslist and vertical sites like Rent.com, Realtor.com, Monster.com and the like. But now it seems like display is following, and it's just going to keep going down from here.

Negative Momentum: Newspaper Ad Revenues Gaining Downhill Speed (Even Online Is Declining)

What does a New Zealand YP Company have to do with us?

Kelsey group had an interesting writeup today of Yellow Pages Group New Zealand's acquisition of a majority stake in a couple sites targeted at people over 50. On it's face, seems like it's not a big deal, but thinking about it further, I tend to think this is a really astute move and something we should think about when looking to expand our local (and YP specifically) businesses in the US.

The core Internet demographic (teen-40 years old) are getting pretty locked in to going to Google or Yahoo or other Internet pure-play sites to get their information. It's that activity that's hurting YP revenues with those types of users. However, print Yellow Pages still experience strong usage among people 40 and over, and haven't slowed too much in that age group. However, that slowdown is likely to come, and before it does, Yellow Pages companies should be looking to expand their brand equity with that demographic by providing them with Internet destinations and experiences that suit their needs and wants. Similar to the posting I wrote about women being a core demo of YP sites online, I'm going to argue that we need to focus our experiences towards those customers who still provide us good usage, that we have not yet lost to the Internet pure-play companies.

YPGNZ has shown us an example of that kind of forward thinking, and we need to start thinking that way here as well.

Kelsey Group Blogs » Yellow Pages Group New Zealand’s Boomer Acquisition

IYP Reach in the US (according to Google)

Via TechSoapBox:



IYP Reach in the US (according to Google) - Tech Soapbox

Borrell says YPs to lose $5 Billion in Revenues in 5 Years

Not sure I believe this one, but that's the headline. If you look at the comments of the post I linked to on Screenwerk, Borrell indicates the changes in each category over the next 5 years:
Directories -38.9%
Direct Mail - 32.0%
Telemarketing -28.9%
Newspapers -11.0%
Radio -7.0%
Other Print -3.4%
Broadcast TV -2.1%
Online +22.7%
Out of Home +30.2%
Cable +54.8%
Cinema +313.8%

Not to nit-pick one number and use it to impugn the whole survey, but the newspaper number strikes me as being off. They are losing share every day in classified advertising and are talking about raising prices, which should reduce their reader bases (print at least) and hurt their ad revenues more. I think directionally, these numbers are correct, but not sure about their magnitudes.

Borrell: YPs to Lose $5 Billion in 5 Years « Screenwerk