June 21, 2006

According to a new study done by the NAA (Newspaper Association of America), online advertising and print expenditures together totaled a little over $11 billion for the first quarter of this year, a 1.8 percent increase over 2005.

Expenditures for print ads in newspapers totaled ten-and-a-half billion, a 0.3 percent increase over the same period in 2005, led by strong increases in real estate advertising, the NAA said.

Broken down by segment, the data shows that Retail and National advertising spending fell 1 percent and 4.8 percent respectively, while classified ads grew 4.7 percent, compared to the same time in 2005.

Within the print classified category, real estate advertising climbed 26.3% to $1.1 billion. Recruitment advertising increased 2.4% to $1.1 billion.

Automotive was down 14.5% to $940 million. All other classifieds were up 11.9% to $702 million.

Advertising spending for newspaper Web sites in Q1 2006 totaled $613.28 million, up from $454.62 million a year earlier, equating to an increase of 34.9% according to preliminary estimates from the NAA.

"As the main ad-supported medium in local markets, newspapers that understand news trumps papers can rake in a fair share of the still-evolving local online advertising market," said David Hallerman, eMarketer Senior Analyst.

"Their brands are still strong. Part of the steady cash flow many newspapers generate needs to be diverted for making their Web sites into complete multimedia centers for the increasingly non-paper focused local audience."

Clearly, online ads are an important driver of the newspaper industry's continuing growth.

However, it is worth noting that total print and online newspaper advertising spending totaled $49.4 billion in 2005, of which only 4% of that spending was done online, so the demise of the broadsheet and tabloid is still some way off.

Source: eMarketer