According to MediaPost, 2005 is turning into one of the worst years in recent history for newspaper-based advertising. While that will come as no surprise to most of us who moved from paper-based papers to online years ago, it is striking how rapid and nasty the downturn is. For example, national advertising and retail advertising are both flat, which is fairly remarkable in a broader economic upturn.
Mind you, there is a bizarre silver lining in all of this:
The only really good news for publishers is that the investment firm believes the cost of newsprint, which has risen recently, is likely to fall slightly in 2006, as demand falls more quickly than production capacity. The report said newsprint prices would peak and then slowly recede in the second half of the year.
In other words, while the demand for newsprint is tumbling, paper manufacturers are still printing away, so prices will follow suit. Short newsprint makers !
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Newspapers can’t deliver relevant ads to a relevant audience, in a manner that lets readers explore, rank, sort, search and bookmark the selection of advertising on offer.
It’s anyone’s guess how they’re gonna solve this problem.