US newspaper advertising revenue rose by an estimated 4% in January, representing no real change in momentum from the fourth quarter of 2004, according to analysts Merrill Lynch.
Newspaper industry advertising growth is also predicted to be around 4% for 2005, despite retailer and telecom mergers that could affect spending plans later in the year. Merrill notes however, that January and February are usually slower times for advertising and thus not always a great indicator for the year.
Retail advertisement revenues were reported to have risen in the low single digit range for most newspaper companies in January, echoing 2004’s pace. On average, Merrill characterises January classified ad revenues as up by around 5% with disparity across the companies, some of which witnessed a sequential slowdown from December.
Consumer magazine advertising revenues grew by 9.7%, despite a drop of 0.4% in advert pages in January 2005, according to the Publishers Information Bureau (PIB). Merrill Lynch predicts a 5% increase in magazine revenues in 2005 following an estimated 6% gain in 2004.
Food & food products showed the largest rise in advert pages in January, enjoying a 37% increase, but the technology sector remained weak with a 17% decline. Overall, Merrill reveals that eight out of the top 12 advertising categories showed a decline in advertising pages in January 2005.
A recent report by PricewaterhouseCoopers predicts a strengthening in the UK newspaper industry, acknowledging growth potential for revenue and profit levels (see Newspaper Industry Predicted To Strengthen). The increasing fragmentation of the media, particularly radio and TV is estimated to result in a premium being put on national newspapers as a medium with the ability to deliver to a mass audience.
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