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What Factors Affect Newspaper Advertising Revenue?

Online newspaper advertising costs are often set according to how many visits the website has per day.
Newspapers do not have the circulation numbers or share of advertising revenue they once had.
The volume of ads a newspaper receives is influenced by the overall economy.
Newspapers no longer reign supreme as the go-to place for advertising.
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  • Written By: Terry Masters
  • Edited By: Shereen Skola
  • Last Modified Date: 16 August 2014
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Some of the major factors that affect newspaper advertising revenue include circulation levels, competition, readership demographics and the state of the economy. The Internet has had a profound effect on advertising in print media as a whole. Newspapers in the US, for example, are facing significant declines in revenue as they adapt to new technology. The factors affecting newspaper advertising revenue in the 21st century reflect technological advances that have changed public consumption habits, rather than just the consequences of a significant economic downturn.

Traditionally, the amount of advertising revenue a newspaper can expect to generate depends largely upon its circulation numbers. These numbers are tracked throughout the year and advertising rates set based on the results. Advertising across media has always been tied to the number of people expected to see an advertisement and the quality of their attention. Free Internet news sources have offered significant challenges to traditional newspapers trying to maintain circulation numbers and related advertising revenue.

Competition is another factor that affects newspaper advertising revenue. The Internet has opened up new options for advertisers to spend money, including online periodicals, blogs, videos, social websites and podcasts. Not only are newspapers no longer the only option for news in print, they no longer reign supreme as the place people go to search for jobs, list real estate for sale or to buy and sell personal items. Advertising revenue is now more disbursed across many consumer sources, and newspapers are only a shrinking portion of that landscape.

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Another factor that affects newspaper advertising revenue is the demographics of a paper's readership. Papers with reader bases that are perceived as more affluent, educated or professional can typically charge a higher advertising rate that targets makers of luxury goods. Likewise, a newspaper that focuses on a valuable target group, such as mothers of a certain age, can tailor its advertising rates to capitalize on its captured audience, increasing revenue in this manner.

The most consistent factor that has affected newspaper advertising revenue historically is the overall state of the economy. Whenever the economy is perceived by consumers in a negative light, important sources of advertising revenue have a tendency to dry up. For example, if the real estate industry is in a downturn, sales of advertisements in that category decline dramatically. The same is true in other important newspaper advertising categories, such as general classifieds, help wanted and the automobile industry.

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Discuss this Article

anon276162
Post 10

Help me design my questionnaire on the impact of cover page on sales of newspapers. Please suggest to me questions.

I am a student and I want to do research on the said topic, so please suggest 10 to 15 questions.

wavy58
Post 9

I subscribe to my local paper, and I read it every day. It may be because I live in a small town where people know their neighbors and adhere to old-fashioned ways, but our town’s newspaper shows no obvious signs of decline.

They seem to have plenty of advertisements every day. This is probably due to their low rates. They know that people around here are not rich, so they keep the cost of running an ad as low as they can.

I think that high advertising rates in larger towns are driving people to advertise online because it’s cheaper. If newspapers would try lowering them, they might be surprised at how many customers they could gain. Businesses are hungry for affordable advertising, and many of them have been unable to promote themselves because of the cost.

StarJo
Post 8

I am a sales representative for a newspaper in a wealthy town of mostly retired people and college students. We have a good reader base, but sales really started drying up because of the combined effect of a strained economy and increased advertising rates.

The people who run our paper had the bright idea to deal with low ad sales by raising rates for the customers who actually do advertise. Needless to say, this did not have the desired effect.

The customers became dissatisfied with us because of our steadily growing rates in a time of financial distress. As the go-between for the paper and clients, I heard a lot of complaints, and lots of folks felt we were taking advantage of loyal advertisers.

Oceana
Post 7

I do graphic design for a newspaper, and I have seen firsthand what a drop in the economy can do to advertising revenue. A couple of my coworkers got laid off, and my hours got reduced so that the company could deal with the monetary losses.

The poor housing market affected us negatively. A lot of our advertising revenue came from realtors, and when they stopped making tons of money selling houses, a lot of them either quit advertising altogether or went with much smaller, cheaper ads.

After nearly two years of a down economy, the company trimmed eight hours off of my weekly schedule. They did the same to the other designer, because there simply weren’t enough ads to design to keep us busy all week.

OeKc05
Post 6

I work at a newspaper, and we used to offer our articles free online. However, as sales and subscriptions declined, we came up with a different strategy.

We started offering just the first paragraph of an article for free on our home page. If you want to read the full story, you have to buy the online version of the paper. You can buy just that day’s paper if you wish. If someone is really interested in a certain story, this technique works.

We also offer online subscriptions at a lower rate than print subscriptions, because we don’t have to factor in the cost of printing supplies and paper. Hundreds of people signed up for it.

Monika
Post 5

@JessicaLynn - I agree with you. I think that's why certain newspapers such as the New York Times are now charging for their online editions.

When their app first came out, it was free to read all the sections of the Times online. Recently they made it so the feature stories are available for free, and you have to subscribe to see anything else.

I believe they did this to replace some of the advertising revenue they were losing because people were switching to reading their paper online.

JessicaLynn
Post 4

I think the Internet has changed the world of newspaper advertising a lot. I also think that tablets have something to do with it too.

Tablets are growing popular and new and improved tablets are always coming out. I think as more and more people buy tablets, even more people will switch over to just reading the newspaper online. With a tablet you get a lot of the benefits of a print paper such as portability, still for free!

allenJo
Post 3

@everetra - I guess I’m still an anachronism in the Internet age. I still subscribe to the daily newspaper. It’s not that I don’t realize I can get the information online; I do, but I spend all day in front of my computer at work.

Early in the morning, however, I like to have a cup of coffee and sit up and read the daily news before getting my start for the day. I still like reading the old fashioned way.

I believe that printed newspapers will never completely go out of style, in the same way that books will never go out of style. I predict that as more of baby boomers retire, printed newspaper circulations may actually go up, giving a boost to readership and newspaper advertising rates.

everetra
Post 2

@miriam98 - Yeah, the only time I would go out and buy a newspaper now is on Sundays, to get their full edition with all of the weekly circulars and specials. I still like the Sunday edition because it has all the style, food and book sections. I don’t know if I can get that online or not, but I prefer the full edition in hand on Sunday.

The reality is that newspaper ad revenue is impacted by circulation, and I regret that I am part of the problem from their perspective, but this is the Internet age as you say. It’s hard to justify those rolls of paper being dumped on my driveway every morning.

miriam98
Post 1

I used to subscribe to the newspaper but do so no longer. I have old copies of newspapers in the closet which I use for padding for various projects around the house.

The reason that I no longer subscribe is the Internet, plain and simple. I see no reason to pay for news that I can get online. Even the local newspaper has an Internet presence. I don’t know if I can get every page of their local print newspaper in their online edition, but I can get enough to make it worthwhile.

Every now the newspaper company will send me free editions of their newspapers, as part of their newspaper promotions to lure me back. It never works, sad to say.

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