Online Newspaper Ads Spiked in Q1

Online newspaper ad spending rocketed up nearly 35 percent to more than $613 million in Q1 2006 compared to Q1 of last year, according to a new Newspaper Association of America (NAA) report. Though other print ad categories dropped, print classified advertising rose 4.7 percent, led by a big boost in real estate classified spending. In all, print paper ads were up 0.3 percent to $10.5 billion.

“Newspapers are beginning to establish separate value for their online ads,” commented Peter Krasilovsky, principal of local media consulting firm Krasilovsky Consulting. “That accounts for some new dollars coming into the stream.” Until recently, many newspaper publishers provided Web advertising as value-adds, meaning they were given as a free bonus along with purchase of print ads.

Despite struggles to compete as local advertisers put money once spent on print newspaper ads into search engine marketing and other online ad opportunities, total print and online ad spending on newspapers during the 1st quarter was up slightly by 1.8 percent to $11.1 billion over Q1 2005.

Autos, jobs and real estate advertisers, the bread and butter of newspaper classifieds, are putting more money into online classifieds sites and other Web venues. The report shows that auto advertisers spent 14.5 percent less in print in Q1 ’06 than Q1 ’05, shelling out $940 million. Real estate advertisers, however, drove a good deal of print classifieds, spending $1.1 billion, or over 26 percent more than in the first quarter of 2005.

Real estate advertisers continue to place print classifieds because “real estate agents like to have total market coverage,” observed Deanna Lewis, sales manager for Suburban Online Network, a division of non-profit trade association Suburban Newspapers of America.

As the real estate market softens from its recent boom, Krasilovsky noted, “Now real estate agents are much more eager to push every button they can.” He suggested that at the height of the boom, real estate agents didn’t need to do as much classifieds advertising since demand was so high.

The fact that online newspaper readership is growing may be convincing advertisers to put more money into Web newspaper ads, too. An April report from the NAA found that unique visitors to newspaper sites rose 21 percent last year.

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