Report: Newspaper advertising expected to rise in 2011

By David Silverberg

A new report on newspaper advertising and operations is dubbing 2011 “the year of return to positive growth.” Respondents to a survey expect digital advertising to rise 18.1 percent among North American newspapers.

While 2010 might have been a gloomy year for newspaper advertising, a new report says 2011 should see an uptick in advertising on most fronts. The extensive Preview 2011[PDF] report from Kubas Primedia in Toronto surveyed more than 400 newspapers in Canada and the U.S., and concluded “improvement is expected in all categories of newspaper advertising revenue in 2011.”

The biggest growth area will be digital. In 2011, Kubas projects digital ad revenue will rise 18.1 percent, compared to the next highest category, retail display at 4.3 percent. On the flip side, National display advertising is expected to decrease by 1.4 percent and real estate classified will sink by 1.7 percent. Overall, advertising in all categories will rise by 3.4 percent (based on a weighted average).

In Canada, digital ad revenue will rise slightly more compared to its U.S. counterparts (although no specific numbers were given). Also, “Canadian newspapers are more optimistic about both national and display advertising, but more pessimistic in most classified categories, as compared to U.S. newspapers.”

In an interview with Kubas executive vice-president Ed Strapagiel, Future of Media learned Canadian newspapers are in better shape than American media outlets. “A lot of Canadian newspapers are hanging in there, they have trimmed staff and cut costs and I don’t know of too many cases of imminent closures,” he says.

The survey found smaller circulation U.S newspapers (under 25,000) tended to more optimistic in most categories, except for digital.

The report stated digital ad growth is seen as a driver of the overall advertising climate. Strapagiel explains expectations for digital ad revenue is higher than any other category, and newspaper often link digital growth to print growth.

The Kubas survey also looked at operating initiatives, such as cost. An area where newspapers on both sides of the border want to strengthen is their website features and design. Also, many newspapers have completed plans to narrow the width and shorten the newspaper pages’ cut-off.

Strapagiel surveyed newspapers on their plans to charge website visitors for content. Fifteen percent of outlets have plans to start charging for online content, and 36 percent are considering the idea.

Strapagiel notes Canadians were 50 percent less likely to charge for content compared to American newspapers.

Since the data in the report is based on the respondents expectations, are media executives over-optimistic? Strapagiel says newspaper executives tend to have “this online-will-save-our-bacon attitude which is probably not justified.” In his 2010 Preview, respondents were also unrealistic about digital advertising’s potential. “eReaders and iPads are certainly perking up digital possibilities but it’s difficult to know how much or when these technologies will pay off for newspapers,” Strapagiel says.