SHIFTS IN NEWSPAPER ADVERTISING EXPENDITURES AND THEIR IMPLICATIONS FOR THE FUTURE OF NEWSPAPERS

Abstract

For much of the 20th century newspaper advertising expenditures experienced strong and regular growth and a close link between that advertising spending and gross domestic product (GDP) was observable. Using a US dataset from 1950 to 2005, this paper explores advertising growth trends, the extent to which the relationship between GDP and newspaper advertising expenditures is being maintained, and changes in expenditures in different categories (retail, classified, and national) to determine whether and how the long-term trends are shifting. The author finds that the relationship between GDP and expenditures is weakening, that growth is not keeping pace with inflation, and that there is greater volatility in advertising than seen in the past. The author concludes that trends indicate the advertising expenditures will plateau and decline in the future, denying newspapers revenue growth that is critically needed for sustainability.

Keywords:

• advertising
• business models
• newspapers
• trends