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Spending on online newspaper advertising jumped to $613 million in 1Q06, up 34.9 percent over the same quarter last year, according to an NAA report. Print and online combined for $11.1 billion in sales during the quarter; that represents only a 1.8 percent increase over 1Q05. With the online component, print sales were up 0.3 percent. Clearly online ad sales are increasing in importance but, for a little perspective, consider that the digital ads still represent less than 6 percent of the combined amount.
AdAge: Merrill Lynch newspaper and internet analyst Lauren Rich Fine told a business group in Akron, where the Knight Ridder-owned Beacon Journal is on the block, that online classieds are the biggest threat to ad revenue growth. Fine: “At the peak of classified it probably contributed about 45 percent of ad revenues, so let’s call it about 35-38 percent of total revenue but close to 70 percent of the profits.”