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Ad revenue fall plus sales drop add to print gloom

Media researcher Jim Bilton, in a review of the latest ABC figures for the nationals, adds to the gloom with a startling figure on advertising revenues. He says, in a Media Guardian article, that advertising now makes up 51% of the revenues of national newspapers, down from 60% in 2000.

Bilton points out that this drop is in part due to the cyclical downturn in advertising, but combine it with a 4.5% year-on-year fall in circulations and the stark reality becomes clearer.

His figures include considerable variations, with advertising making up only 44% of the revenue of popular Sundays compared with 61% for their quality rivals.

What this means is that newspapers are having to chase sales revenue from a declining market. Hence, he says, the publishers’ drive to “develop new routes to market, often at a range of cover prices”.

Journalists have long worried that British newspapers were too dependent on advertising but at the moment every penny is needed to cope with transition to a world with the internet.

In August last year when the Evening Standard hiked it price from 40p to 50p, declaring itself to be London’s quality paper, circulation stood at 313,181. In February this year it was down to 266,037.

If every paper was sold at full price, the total retail value last August was £125,275 and in February this year £133,037. That is a modest increase but the promotion costs have been considerable. And what has a fall like that done to ad revenue?

A trading update from Daily Mail and General Trust last month does not shed much light on the performance of the Standard but does say that in the five months to February: “Classified advertising revenues, including those of the Evening Standard, are down by 8% for the same period.”

The arithmetic of newspaper revenues is much more complicated that that but of the face of it picture does not look good.

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  1. Notes from a Teacher: Mark on Media » Tuesday squibs says

    […] Ad revenue fall plus sales drop add to print gloom. From the UK, where newspapers are also facing the double-barreled threat to their bottom lines. […]