The Advertising Rebound Eludes Newspaper Publishers
Monetizing digital content won't come easy for Gannett and New York Times.
Overall media advertising has rebounded after the economic downturn that started in early 2008, but newspaper publishers have yet to see positive growth. As illustrated below, advertising industry dollars began to decline in the second quarter of 2008, but the drop was more pronounced for newspaper publishers, continuing a secular shift from print media that started before the recession. Even as the economy has improved, newspapers are still posting year-over-year revenue declines, while television and online advertising have rebounded sharply. In our view, the newspaper industry's decline will prevent Gannett (GCI) and New York Times (NYT) from sustaining positive top-line growth, given their dependence on publishing (roughly three fourths of total sales for each firm).
Predictably, advertisers are allocating fewer dollars to newspapers as consumers continue to spend more time watching television and surfing the Internet. As newspaper circulation drops, newspaper ad spending should also decline, creating a vicious cycle. U.S. newspaper circulation has fallen during each of the past 15 years, and newspapers' share of ad spending decreased to 23% in 2009 from 31% in 2002. Aside from the increasing amount of time people spend on the Internet, this medium attracts advertisers as it allows for more targeted and measurable marketing. The advent of portable digital technology (such as smartphones) has only accelerated the decline of newspapers.
Joscelyn MacKay does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.