Newspaper Earnings Show Slowdown In Online Ad Growth

In reporting their respective Q1 earnings, newspaper companies have been able to point to at least one general bright spot over the past few quarters: online ad revenue increases, mostly from online classifieds. But as the earnings for the NYTCO, Gannett and Tribune have shown, interactive ad dollars are not growing as expected (Dow Jones and the smaller Journal Register Company represent the exceptions). And as WaPO prepares to release its Q1 earnings, the CEO of its online division tells the WSJ that online ad growth is slowing across the board. The outlook for newspapers this quarter, according to the WSJ piece:

— Online ad spending for newspapers will likely fall to a percentage in the low 20s this year from 28 percent last year, Borrell Associates estimates, reflecting a broader trend, as EMarketer predicts the overall growth of U.S. online-ad revenue will slow to 18.9 percent this year from 30.8 percent last year. It predicts newspapers will do slightly better.

— Competition from TV stations’ and magazines’ websites represents a new challenge, with outlets in those categories stepping up their digital efforts, as we reported last week. Other challenges are coming from sites like MySpace’s recently launched news feature. Also, advertisers are taking blogs and newsgroups more seriously, says one digital ad agency exec.

— The areas that have so far proved strongest for newspapers

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