Newspaper revenues to plummet in 2009 says new study

Online revenues, while growing, will pose challenges in the New Year, and employment classifieds are the 'next disaster area.'

Newspaper revenues in 2009 will plummet while online revenue will grow, states Preview 2009 – a survey of 400 daily newspaper executives by Toronto-based marketing research firm Kubas Consultants.

The online survey of both US and Canadian newspapers, of all sizes, revealed that more executives projected a downward spiral rather than increases in seven out of eight ad revenue categories -including employement classifieds, the ‘next disaster area,’ at – 16% projected change, says the report. While online ad revenues appear to grow at 13.6%, automotive and real estate classifieds, among other categories, will see decreasing growth in ad sales of -15.5% and -13.8% respectively.

Canadian newspapers also have some different priorities. In addition to website improvements and staff reductions, they are more focused on improving sales technology and upgrading printing equipment.

So what are the new strategies in place to offset this downward swing? Executives in the report say that developing online, both in terms of content and advertising programs, is still high on the list of strategic initiatives in the New Year. Improving rate structures and pricing programs has become the next priority as well for many newspapers.

Newspapers are also controlling staff and non-staff costs with many already undertaking those changes. While many newspapers have also reduced their formats, and a third of newspapers have plans to do so in 2009. One in five newspapers is considering outsourcing printing and closing their own plant. Also, the enthusiasm of niche publications has cooled off for the next year.

The report says that although online is a bright spot for 2009, recent numbers do not support that enthusiasm. By Q3 2008, newspapers’ online revenues started to decline mainly because online ads on newspapers websites are closely tied to print, particularly classifieds. Online is still a small percentage of total ad newspaper revenue and will not replace the dollars lost in print.

A total of 422 survey replies were received in the report.

The complete report can be viewed here