Classified Ad Revenue Takes a 10-Year Dive
Fair warning to the print people out there:
More bad news has just fallen from the sky and landed in this space -- among other places ...
In his "The Biz Blog" Poynter's Rick Edmonds is the latest to amplify chilly tidings on the newspaper advertising (cold) front.
Edmonds notes that classified advertising at newspapers has dropped a whopping 70 percent over the past 10 years. In 2000, newspapers collectively counted on classified ads to make them $19.6 billion annually. In 2009, that figure had plummeted to $6 billion.
This really is a startling decline. (see chart below)
There was a time when classified advertising was actually the bread-and-butter of a newspaper's operating budget. In 2000, it is estimated that classifieds accounted for approximately 40 percent of overall profits.
Classifieds were also a hit with readers, and helped to drive single-copy sales. Many folks used to take the paper for just the classified section alone. Those days are probably just about over, and along with them the added circulation revenue.
While "toting up the figures" for his coming State of the News Media report, Edmonds found that most of the decline ($7.9 billion worth) came from recruitment advertising, another victim of the myriad free sites aimed at jobs on the Internet.
A small thing that Edmonds didn't mention -- at least not yet -- is that over the past decade many, many newspapers adopted a model in which personal or smaller classified ads were free to readers both in print and in their online editions -- things like garage sales, and furniture and pets sales.
Newspapers' hands were forced to go the free route, of course, because of the number of free classified sites online. Certainly this would account for at least some of the lost revenue, however small.
Interestingly, these smaller ads fall into the 'other' category in the chart, which has actually held pretty steady over the past decade.
I'll suppose that some of this 'good news' has to do with the fact that many newspapers have adopted a pay approach toward obituaries. It used to be that most newspapers ran obituaries gratis. This looks like a rare case of found money for newspapers.
In finishing up, I'll toss a bouquet of hope to newspaper-lovers out there.
You'll see that both real estate and auto classified advertising saw a huge $2.1 billion dip collectively between 2008 and 2009 alone.
This would almost certainly have to do with this deep recession we find ourselves in. It is hardly news that house and car sales have plummeted over the past year or so.
If, and when, the economy starts coming back, it's fair to assume that at least some of that advertising revenue will ride in with it.
Sorry, print-lovers, that's as good as I got where any good news is concerned.
| 2000 (billions) | 2008 (billions) | 2009 (billions, estimated) | |
| Auto | $5 | $2.3 | $1.3 |
| Real Estate | $3.2 | $2.5 | $1.4 |
| Recruitment | $8.7 | $2.2 | $0.8 |
| Other | $2.7 | $3 | $2.5 |
| Total | $19.6 billion | $10 billion | $6 billion |