US Newspapers enjoyed double-digit growth in their online advertising revenues in the second quarter of 2005, with online adspend rising to $500.7 million, up 28.6% compared to the same period last year.
According to the Newspaper Association of America (NAA), overall advertising revenues for newspapers and their websites totalled $12.2 billion for the second quarter of 2005, a 2.8% rise year on year.
During April, May and June, print adverts in newspapers grew by 1.9% year on year to reach $11.7 billion, while classified advertising led growth offline, increasing by 5.3% to $4.1 billion, while retail advertising by rose 1.4% to $5.5 billion.
Commenting on the results, John F. Sturm, NAA’s presidents and chief executive officer said: “Newspaper sites continue to rank at the top of the most visited online news sources in the nation. The significant growth in online ad spending is recognition of newspapers’ leadership position on the web.”
These findings are confirmed by US analyst eMarketer’s latest Online Publishing: Focus on Newspapers report which predicts the online newspaper industry to enjoy strong gains over the next three years, with revenues forecasted to increase to $2.26 billion in 2008, up from $1.03 billion in 2004 (see Online Newspaper Industry Forecast To Enjoy Strong Gains).
eMarketer claims that consumption of online news is rising, due to increasing broadband adoption, as well as a behavioural shift among consumers.
Online news is now seen as commonplace, and is increasingly being used as an information source. A survey done earlier in the year by Merrill Brown for the Carnegie Corporation revealed that the US population is shifting to the internet as their primary source of news (see Internet Becoming Primary News Source In US).
At the beginning of the summer, Merrill Lynch, revised its adspend forecasts for the US newspaper industry, with estimates for advertising expenditure being lowered due to an uneven economy and a lack of industry resurgence for the second half of 2005 (see Merrill Revises Down US Newspaper Ad Predictions).
Merrill forecasts newspaper adspend (print and online combined) to rise by 3.3% in 2005, revised down from 4%, based on uneven economy and an unlikely industry resurgence in the latter half of 2005.
New predictions for 2006 see newspaper adspend at 3%, down from 4%, based on slightly lower forecasted economic growth and more muted ad rate increases.
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