Newspaper advertising was down 7.3 percent, almost $2 billion, in 2011

The Newspaper Association of America has posted its final tally of newspaper advertising statistics for 2011, and as expected, it is not a pretty picture.

Total advertising revenue was down 7.3 percent, a percentage point worse than in 2010. Print advertising was off 9.2 percent year-to-year.

Digital advertising revenue, after a comparatively weak fourth quarter, grew 6.8 percent for the year.

So the industry posted total ad revenues of $23.9 billion, a decline of $1.9 billion from the previous year. NAA does not have current numbers on circulation revenue and is only starting to assemble data on revenue from such activities as contract printing, events, or social media assistance to businesses.

Figure that those add roughly $10 billion, making newspapers a $34 billion industry. Google alone, by contrast, recorded revenues of $37.9 billion for 2011.

In updating numbers released previously for the first three quarters, NAA identified two shifts occurring late in the year.

Digital grew by only 3.1 percent in the fourth quarter, less than half the rate of growth in any of the earlier quarters.

Retail, by contrast, showed what the industry likes to call "sequential improvement." It was still down -- by 6 percent -- in the fourth quarter compared to the same period in 2010, but that was a smaller rate of decline than for the earlier part of the year.

The results are consistent with a number of public company reports that showed fourth quarter digital ad revenue growth slowing, or, in some cases, falling year-to-year.

What's the hitch in digital? Randy Bennett, senior vice president  for business development at NAA, said in a phone interview that one factor could be that the 2010 fourth quarter was extremely strong for digital ad growth (roughly 14 percent year-to-year), so the comparison was tough.

Chris Hendricks, digital chief at McClatchy, said he was unaware of a particular problem. But because of a strong holiday season, especially in November, sales forces may have shifted their focus back to retail business in print.

The numbers are consistent with a recent Project for Excellence in Journalism study that found slow culture change at newspapers and digital ad revenue growth coming nowhere close to replacing print declines. If anything, the problem worsened in 2011 from the 7 to 1 ratio PEJ found from companies it surveyed, drawing mainly on 2010 results.

Bennett said that NAA is aware that its traditional data gathering needs to be revised to capture digital circulation revenue as newspapers phase in digital pay wall systems. Also there is no attempt yet to total revenue from other ventures that some companies have developed quickly over the last two years.

NAA plans to survey its members in coming months, Bennett said, to assess the impact of these new revenue sources on the financial health of the industry.


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