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Two charts that tell you everything you need to know about the future of newspapers

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There are a number of different aspects to the debate over the future of newspapers: the social impact of only printing several days a week, for example, or the impact of cutbacks on the public-policy role that newspapers play. But one of the most crucial elements of this debate is understanding the hard financial realities of the industry, since that is what ultimately determines how much newspaper owners will be able to do (if anything). On that score, two charts came out this week that make that point better than anything I’ve seen.

The first is a chart based on figures from the Newspaper Association of America, and it shows newspaper advertising revenue from 1950 — when the association first started keeping records — to 2012. As economics professor Mark Perry notes in a post at the Carpe Diem blog, the chart shows ad revenue falling off a cliff about a decade ago, hitting a brief plateau in the mid-2000s and then free-falling over the next several years (this is an updated version of a chart that appeared last year).

The speed with which billions of dollars in advertising revenue simply evaporated over the past decade is incredible: as Perry notes, after adjusting the figures for inflation, total print ad spending last year of about $19 billion was below the level set in 1950. It took 50 years — a generation, in other words — for ad revenue to go from $20 billion to a peak of $65 billion in 2000, but it only took 12 years for that progress to be erased. Print revenue dropped almost 50 percent in just four years.


Of course, all of that advertising revenue didn’t simply disappear overnight. So where did it go if it wasn’t going to newspapers? It went online, naturally — and the second chart shows the biggest beneficiary of that exodus: namely, Google. Media consultant and former newspaper editor Alan Mutter combined the latest revenue numbers from the newspaper association with the numbers disclosed by Google about its advertising income, and the resulting chart shows that Google now brings in twice as much as all the members of the U.S. newspaper industry combined.

According to Mutter’s graph, the crossover point — that is, the point at which Google’s growing advertising revenue eclipsed the newspaper industry’s rapidly declining print revenue — occurred in 2009 or so. Since then, Google’s revenue has soared to $46 billion (this is actually Google’s total revenue, but the vast majority is advertising) and the newspaper industry’s revenue has fallen to a little over $20 billion. While many newspapers seem to blame Google for their destruction, this is like blaming a hurricane for the loss of your house — it may have some truth to it, but it ultimately doesn’t help.

google v newspapers.pptx

Obviously, this dramatic decline in the core of the industry’s business model — something Mark Perry calls “one of the most significant Schumpeterian gales of creative destruction in recent years” — helps explain why newspaper companies are going bankrupt, shutting down their print operations, engaging in successive rounds of layoffs and taking other measures to try and cut costs. But in many cases this is like trying to catch a falling knife.

A growing number of papers are also implementing subscription paywalls in an attempt to bolster what little print revenue they still have, with a majority of the large newspapers having some form of barrier. But while the NAA noted that revenue from subscriptions rose by 5 percent last year, that is a tiny drop in a rather large bucket. As Reuters writer Felix Salmon noted recently:

“In a dying industry, the sensible thing to do is to maximize your revenues before you die. Paywalls might well make money for newspapers. But that doesn’t mean that newspapers aren’t dying. Quite the opposite.”

Note: Some readers have pointed out that Mutter’s chart compares U.S. newspaper revenues to Google’s worldwide advertising sales, which is true. According to recent eMarketer estimates, Google brings in about $15 billion in ad revenue in the United States. So not quite as much as the newspaper industry, but close — and that figure is rising, while newspaper revenue is still falling.

Post and thumbnail photo courtesy of Zarko Drincic

37 Responses to “Two charts that tell you everything you need to know about the future of newspapers”

  1. MLehtinen

    Has anyone noticed that the drops often correlate to wars or ‘conflicts” and that the industry shot up AFTER the pundits said it would die off with the advent of color TVs? Look, newspapers are a game like any other publishing effort at a certain level. They are great tax write offs for conglomerates, who expect some things to lose money. That is why the big guys rarely hold a paper for more than 5 years; the same amount of time they have to lose money as a tax writeoff. As long as there are readers who want have an outside opinion and there are advertisers who do not want taxes and government spending or activities to increase or reach into the orivate sector, there will be some form of the news business out there serviing the needs of an educated democracy. Anything less would be folly.

  2. Rustan Burton

    I’m not sure it is as easy as comparing two graphs. The economy itself has had more of an impact on newspapers than just online. You could place this graph up next to numerous industies and see the same decline over the last 12 years. Consider that the auto industry, the real estate industry, and retail have all had major issues over the last few years and they were major staples of ad revenue for newspapers. I would suggest that to get an accurate veiw of the future of newspapers you would need a better data sample than just the last 4 years. Until the economy steadies I am not sure you can really attribute newspaper problems to one thing or another.
    In regard to newspapers not taking advantage of new forms of digital advertising, I think that is blatantly false and an uninformed comment. Newspapers have been transforming into more than just newspapers. They are leaders in most local communities when it comes to SEM, SEO, targeted digital display ads, Yahoo behavioral targeting, digital publications, preroll video ads, help wanted websites, car directory websites, mobile advertising. The list goes on.
    In my opinion newspapers still control their future. It is the content that matters and newspapers control a lot of the best content-especially when it comes to local. If newspapers really felt that taking things online was going to lead to their demise, then they would simply just not put anything on their website. If there is no good content online, then you would be forced to go back to print to get the scoop on what is happening in the community. No other local media source currently offers the in depth info like the paper.

  3. Same problem worldwide. Times of changes and reinvent themselves. In depth analysis of current trends (time is gold even for reading) and market knowledge: what the public needs and demands if you have to pay for it (weekly quality product maybe with top writers in all areas from culture and entertainment to politics to spend part of your weekend reading) or how to increase ad figures based on your readers. In summary, new business model, with a very flexible cost structure instead of a big fixed one.

  4. There is truth to this article in the sense that newspapers are dying because ad revenue has fallen off a cliff. But the article seems to be saying that Google has somehow captured much of that disappearing revenue and hence is responsible for some of newspapers’ demise. … Not true. Newspaper advertising fell off a cliff for two reasons, primarily. First, classified ads have almost completely disappeared because of CraigsList, etc. A whole host of other ads have disappeared because of things like,, etc. that are not really related to Google. Second, newspaper subscriptions have fallen off a cliff, which further reduces the rates papers can charge for their ads.

    Going to the internet in a desperate attempt to save themselves, the newspaper business so far has also had a very tough time monetizing its content.

  5. Marc LeVine

    The advent of the paper thin display may just revolutionize journalism and create a new kind of publication that is both tangible and tactile, yet is also dynamic and constantly updating. See an example of that that will look like at

    Here’s the thing. People’s thinking has changed. Over the weekend there was a newspaper article about millennial’s homebuying considerations. Apparently, they no longer want living rooms and dining rooms in their homes. Instead, they would use these rooms as home theatres and home offices, respectively. The status quo of decades has gone away. The “old ways” are disappearing faster than ever before. Newspapers have gotten caught up in the change.

    That being said, if something like a paper thin digital screen (which can be bent and folded) can find it’s way to re-appeal to our sense of touch and all itselfe to be spread out beyond the vision-straining constraints of a tight 7″ or 10″ tablet screen, the printed word (in digital ink) may rise again anf greater than ever.

    After all, more “print” space also allows for more advertsing. The dynamic abilities of constant updating, would double or triple the available room for such ads. And, without paper and print costs – the profits of such technology would go through the roof.

  6. Brian Brennan

    Randy is correct and it is clear he is a media expert.

    One major cause for the confusion and challenges of digital media is that too many bloggers and pundits do not know what “media” is. It is very apparent when we see companies like Google, Apple, Facebook, Amazon, Microsoft, etc. all referred to as “media” companies. Some are; some are not. And then within media there are many different kinds and should not be compared just because they are online. True media is to be distinguished by engagement integrity. The best media comparison for Google is Yellow Pages or Directories.

    This confusion is also clear with the data that is often used when discussing “media”. What is missing from that revenue chart is the increases in readership (print and online) for newspapers year over year. It would be a direct opposite trend compared to revenue. What does that tell us? That while readership has increased (from free websites), revenue has decreased. Some look at “readership” or traffic, but neglect revenue (and then switch to make a different point). See Tumblr, the #4 social media site – yet to turn a profit in 6 years. And Facebook has turned the 50% market penetration mark. That means they will only go down from here (typically) and we are seeing that with a decrease in participation with teenagers. Social media must be analyzed using trends, consumer value and engagement integrity, not just growth.

    We need to start understanding what “media” really is and then use true media fundamentals and smart engaging data and trends to compare that true media.

  7. Angus Swan

    There is an element of shooting the messenger in some of the comments here. The author posts two statistical trends and suggests a correlation between them. Something has resulted in a steep decline in newspaper advertising revenues and it’s at least reasonable to assume that Google is partly responsible (after all, where has all its money come from in the last decade?). But most people seem to take exception that the author is suggesting that newspapers haven’t tried hard enough to arrest this decline. He’s not making that suggestion – he’s merely conveying the fact that what they have tried hasn’t really been effective to date, and one of the central observations is that digital advertising revenue only replaces a tiny fraction of lost print ad revenue. As many of us have thought for years – replacing revenue with digital advertising is NEVER going to work. Therefore papers have to start charging, or eventually become charitable or state-funded institutions. because There’s a secondary glib observation made here that newspapers ‘must’ survive because they meet a vital consumer need/national interest. Well, they are commercial entities like any other and they don’t have a right to defy economics. What is just as likely is that we will have a separation of markets where the rich middle-class inclined to, or needing high-quality news and commentary for their work, will pay for digital content, while the vast majority will consume regurgitated press releases and wire news reposted off free-to-view news sites. Whilst state-funded quality news organisations like BBC might also continue to see their popularity grow.

  8. Antoinette Siu

    I think one important thing to point out about the Google vs. Newspaper ads chart (in response to a couple readers not seeing the relevance) is that the chart illustrates a correlation between the ad sales–not a causation. Thinking about it that way may make more sense to you guys.

  9. Hard to deny the impact of that graphic. It makes me wonder what “advertising” includes. In addition to the image-centric ads found throughout the paper, advertising almost has to include the classified sections right? If so, then I would also add Monster, Dice, and Careerbuilder as possibly larger culprits than Google. I think the shrinkage of the classified section is likely the biggest loss of ad revenue for newspapers, assuming that classifieds are part of that graphic.

    In ~2003, here in backwater Madison, WI. the job section of the Sunday paper was multiple pages. The 2013 Sunday editions so far have about two columns. Even allowing for exaggeration, the decline in the same time frame is dramatic. The remaining classified sections show a similar decline. To my eye though the disappearance of the job classified is the most compelling. Others have mentioned Craigslist. I think it is apparent that the impact on the classifieds by that entity also has to be part of this decline as well.

    I think it would be interesting to see that same graph split out into a bit more detail. Specifically the change in the classifieds compared to the emergence of the Monsters, Dices and Careerbuilders of the online world.

    As they say somewhere…..the devil is always in the details.

  10. In 1971… as part of my revolutionary bent @Boston… my ‘alternative weekly tab’ had a certain cache when commiserating inside the three Boston collegiate bars around Kenmore Square… I grew them to four; suburban press at their most lame. Later, circa ’73, Cong. Markey’s participation in a 24pp political tab/insert… with 23 other candidates for Torbett McDonald’s old Congressional seat (political cash in hand) floated our publishing boat for months ahead; nirvana! NOW? @65… readying my encore… for ‘content’ creators… the world is our oyster! (The latter I plagiarized; now I’m clamm’n up!). Let’s be creative… Aries please bloom! — kr

  11. Even with a porrus paywall, the NYT saw digital circulation revenue grow and advertising slip (

    However, advertising rates will eventually catch up. Paying subscribers are a premium audience and once 90% of newspapers have paywalls, online ad rates will go up.

    Warren Buffett knows the score. He’s invested $344 million in 28 newspapers so far. Last month he warned investors that newspapers without a paywall will “self-destruct from a faulty business strategy.” (

  12. ajbassler

    This analysis also misses a main point. Newspapers, while funded primarily by advertising, do not exist only to provide an advertising medium. Newspapers also exist to inform the citizens of the democracy of the United States. That mission, while affected by declining funding, is never going to entirely disappear. People want and need reliable news. There is a demand. Some entity is going to feed that demand, whether it is newspapers or something else. The “paper” part might go away, but the “news” part never will.

  13. Diary of a [m]Ad Man

    Spot on Randy. People tend to address the industry as a whole rather than realize that it’s the big boys in the big cities that are facing these problems. Small-town, community papers are THRIVING and because they are seeing the tech-trend bury the city papers they are adapting their strategy to insulate their market from the same thing happening. In short, the big daily’s loss is small-community paper’s gain.

    If you don’t believe that small-community papers have value I have two words for you, and one of them is Google.

    “Google Surveys”

    Designed and implemented by Google to provide a monetary kick-back to papers for their online content. Maybe that’s a little like a small-business owner shopping at Sam’s Club while Wal-Mart buries their shop but the revenue is well and the checks all cash.

  14. D. Hunnel

    Re “paywalls” — considering how many alternative free sources there are for almost ANY information out there, the only real benefits offered by newspapers are as a “known bias” aggregator (you find a news source that provides content YOU want to hear about) and to some extent as a content creator (they have reporters, photographers, trained investigators and writers, capturing breaking news). I have “bounced off” of every paywall I have ever hit.

  15. Randy Bennett

    I disagree strongly that “no newspapers have even tried to understand, let alone take advantage of” new forms of digital advertising. I worked very closely with newspapers for many years and there are a lot of very smart people working very hard to leverage all manner of digital platforms. It’s that hyperbole (“virtually no newspapers..”) that drives me nuts. You don’t have to dig very deeply to find many examples of innovation. Also, the “two charts that tell you everything you need to know about newspapers” are not even close to providing a holistic view of the newspaper industry. Newspapers have seen dramatic revenue declines — it’s an old story, we get it, let’s move on.

      • ajbassler

        I recently attended America East, an expo for newspapers held in Hershey, PA. As the owner and publisher of a small newspaper, I’ve been attending such events for years. I can tell you that without a doubt, newspapers big and small are very concerned about having a digital presence for both news and advertising. At least half of the seminars offered are about paywalls, online advertising, reputation management services, apps and other ways to move content and advertising from the paper page onto the digital page. If you don’t think that newspapers are taking the digital world seriously, you are just not paying attention to the industry.

      • Randy Bennett

        I would check out what GateHouse and Star Tribune are doing with private exchanges; Dallas’s multi-tiered digital agency efforts; NYT’s Ricochet product; Denver Post’s mobile strategies; McClatchy and Pandora relationship (although I think Pandora has backed away from local sales, McClatchy drove experimentation with a non-traditional partner); Washington Post and others’ experimentation with sponsored content; Wilmington Star News local tickets sales — to name a few. Don’t know that they all are home runs, but they do demonstrate efforts at innovation.

  16. This post doesn’t say if advertising getting cheaper and/or more cost-effective for the advertisers themselves. How much of the marketing budget in the 1960s, say, was spent on advertising, and have lifestyle changes made it easier or costlier to market products.

    It also ignores other forms of advertising, such as billboard & TV. Google isn’t just taking revenue from the newspapers.

  17. Randy Bennett

    I agree with Gordon that the revenue and growth comparison to Google is not particularly meaningful (who wouldn’t pale in comparison to Google?). Google is not the reason that newspapers have seen a decline in revenue. The challenge for newspapers is that traditional digital advertising growth (according to NAA) was 6.2% where Mr. Borrell himself forecasted a 21.3% growth in local online advertising and the IAB reported an 18% increase in total digital dollars from Q3 2011 to Q3 2012. The industry is absolutely making the right moves to diversify revenue streams and find new sources to replace the old. I, for one, would like to see at least one story on positive developments from the newspaper industry without a “but…..”.

    • Google is not the reason, but it is a symptom of the problem, which is the move to digital and transactional and programmatic advertising — a shift that virtually no newspapers have even tried to understand, let alone take advantage of. That’s how they are related.

      • “move to digital and transactional and programmatic advertising — a shift that virtually no newspapers have even tried to understand, let alone take advantage of. ” is absolutely wrong and unfair. I have to side with Randy Bennett on his remarks. Having spent last several years in the industry, we absolutely understood the need to shift and have been actively trying to take advantage of it both internally and through strategic partnerships. Unfortunately, time, finances, economy and other factors were not on our side and really took a toll on many newspaper companies.

        But there are still those get it and are still trying to make advances.

    • You’re right, Gordon, it doesn’t, directly. But if advertising were a zero-sum game, you could say any medium that gained ad revenues in the period newspapers were losing revenue…but I can’t even finish that hypothetical — because most people would agree the effect of the Internet was to destroy ad revenue, not just shift it around. (Can anyone at Paid Content say “Craigslist” or “eBay” or Zillow, Trulia, etc.?) That’s why I would like to see where people’s attention has been shifting over the years.

    • Really? Advertising on the internet — i.e, Google — increases by billions of dollars and advertising in newspapers decreases by billions of dollars, and you don’t see how those two things relate to each other?

      • It’s entirely different segments of advertisers / budgets / demographic audience / and content. This graph is entirely spurious and shows absolutely nothing that links Google to the demise of Newspapers. If you want to see a credible reason for the decline – see online news outlets (Gawker, Huffington Post, etc) and 24 hour news channels. This is a lazy article with absolutely not cognitive thinking or investigation applied to it outside of looking at two unrelated statistics and molding them to apply to your point of view.

    • BC Buzzz

      Also, google ad sales are global and the newspaper ad sales is American. Apples and coconuts I’d say. Also it’s a sign of what’s wrong with media today.

    • Angus Swan

      Advertising is just a means of conveying a message from a supplier to a consumer. The medium is largely irrelevant, it’s the demonstrable effectiveness in achieving engagement for the supplier-customer that is important. Google, by introducing contextual advertising, increased that chance that the supplier’s advert would be relevant to the consumer, and hence a higher probability of conversion to sale. At the same time, newspapers and magazines pursued a strategy, because they could not compete technologically with Google, that emphasized impact/creative, with display ads, takeovers, advertorial, video etc. The engagement rates for these types of ad is historically low. They can be expensive to produce. It’s not a competitive offering next to keyword advertising that can be bought at auction rates with little creative investment and which proves effective in engaging consumers.

    • albiedelfav

      the google comparison is valid because it portends where local ad dollars are going…into local search. historically, newspapers have earned 80-85% of their ad revenue from local advertisers and 60-65% of their profits from classified advertising, almost all of which is local. everyone knows what happened to classified revenue, and it’s only a matter of time before local display advertising disappears altogether. the final straw will be abandonment of the medium by large national retailers and the companies that broker coupons, both of whom spend heavily on Sunday circulars. online coupons account for only about 2% of the total coupons issued but something like 20% of coupons redeemed. and their growth rate is astronomical. the only hope for newspapers is for readers to start paying their fair share.

    • The culprit was the small ads in Craigslist, which took the revenues in classified ads (30% of a newspaper’s revenues). Craigslist started in 1995-6. Google ads came in 2002 and became significant only in 2004-2005.

      The death of newspapers is due to the economics of print production and distribution. Newspapers require printing plants, distribution networks, vendors, etc. Digital publishing is nearly zero in contrast. Newspapers simple can’t survive, and won’t survive, in that situation.

      I’ve had eight books published. The last two by McGraw-Hill. #9 is coming in a few weeks. It will be released worldwide via digital publishing. I chose to NOT work with a publisher. No publisher can come close to doing what I want. Book publishing too is headed for collapse.

      What about TV? The average CPM for TV advertising in the United States is US$24.68. For web banner ads, CPMs are US$2.66 (that’s 11% of TV’s CPMs. Forrester Research, 2012). So far, TV revenues have risen every year, but this past year was the slowest increase ever. When TV begins to fall, it will fall extremely fast. People in the TV industry are in terror over this.

  18. I’d also like to see a chart of readers of print newspapers over the same time period (since 1950, ideally), against population — and then adding online readers of newspapers, and then Google users. Finally, I’d like to see the trend line of revenue per reader (advertising and subscription) for newspapers vs. revenue per user of Google.