Survey: ad revenue showing improvement at community papers

July 3, 2013

By Stanley Schwartz  | Publishers’ Auxiliary

Now that the financial experts have said the recession is over, newspapers are experiencing sustained revenue growth.

According to an informal survey done by the National Newspaper Association, the majority of those who answered the survey, 20.2 percent, said that in the last five years their revenue has increased less than 5 percent. Fourteen percent said their growth was between 5 percent and 10 percent, with 11.6 percent of the respondents seeing a 10 percent to 15 percent gain in revenue.

Looking at the overall numbers, slightly more than half of the respondents have seen revenue gains, 53.5 percent, as opposed to those newspaper companies that have remained the same or lost revenue.

An estimated 14 percent of the respondents said their revenue has been flat since 2009, with about 16 percent who showed a loss of 5 percent to 10 percent and an equal number who lost more than 10 percent, during that same time.

One publisher noted: “We are down just $800 during that time frame. Statistically, I think that is meaningless, however, with inflation factored in, we are probably down more than 10 percent. Yet, when I look at the number of businesses shuttered and significant loss of population in our area over that same time frame, I think we are doing well or actually growing our market share compared to what it was four years ago.”

Another publisher noted that: “Advertisers have been cutting back the size of their ads and many have been doing much less than with smaller budgets to pull from.”

In order to counter the smaller ads, another newspaper has increased its advertising rates.

“The growth has been through raising rates (more or less to keep up with inflation). We find we have the same number of ads, but advertisers are contracting smaller ads.”


Who is Advertising

in Community Papers?

Rural, community papers have limited local advertisers to draw from, with traditional retailers changing because of technology and the economy.

The majority of community papers that answered the survey, however, still receive most of their ad income from grocery ads, 43.8 percent. The next two top earners are medical based (hospitals and urgent care clinics) 40.8 percent, and tied for third are new auto sales and banks or other financial institutions at 30.8 percent each. Respondents could select multiple categories for where they sell ads. Other answers were:

  • 29.2% Real Estate (existing houses or developments).
  • 28.5%Retail (small stores, including family-owned retail).
  • 27.7% Public Notices (government).
  • 20.8% Restaurants.
  • 20% Retail (large stores, including national chains).
  • 17.7% Public Notices (private foreclosures, storage auctions).
  • 13.1% Auto Sales (used).
  • 10.8% Furniture (new).

Newspaper classified ads took a hard hit because of Web-based advertising options, especially help wanted ads. So, too, did the auto and real estate ad categories. The majority of those who answered the survey said that even today auto and real estate ads have been in decline since the recession and are still weak, 38.3 percent. But close to that number are those newspapers that have seen real estate ads coming back, 26.6 percent. And a surprising 14.1 percent said it is a leading category for them.

One paper anticipates a big swing in market since starting a print and digital real estate product this year. Another said it had lost almost all of its in-paper real estate advertising. To fight back, in 2011, it created a monthly real estate magazine that runs as an insert with extra free distribution. This helped recoup 25 percent of its pre-recession real estate business.

In order to increase this category of advertising, more than half, 56 percent, said they now offer Web-based real estate ads. An additional 37.4 percent have added more color and 31.9 percent have added a special real estate section.

In addition to that, 14.3 percent have started social media options and 11 percent have instituted a new sales structure.

Similar numbers were seen for the changes made to increase auto ads.

  • • 55.7% Added website offerings.
  • 38.6% Added more color.
  • 21.4% Added more photographs.
  • 15.7% Installed a new sales structure.
  • 12.9% Added more social media options.
  • 12.9% Added mobile options.
  • To increase grocery store ads, those that answered the survey said they have:
  • 44.2% Added website offerings.
  • 14% Added more color.
  • 11.6% Added social media options.
  • 11.6% Added more related editorial.
  • 11.6% Added a new insert or magazine.



Online coupons have been making headway in the advertising field, with some newspapers trying to capture part of this market with coupon offers of their own or partnering with a company that currently offers such daily deals. For more than half of the community newspapers in this survey, such daily deal coupons are of no value—59.8 percent said they never offered such promotions. A little more than 11 percent said they had tried it but stopped using it because it didn’t work. And 10.7 percent said they are still using this type of promotion.

One publisher said he “Tried to get it off the ground but the market was saturated by a major daily just 20 miles away.”

Another publisher said: “Daily deals, coupons and gimmicks (front page labels) do not work in this sophisticated—high definition age of media marketing. What works best is gaining the client’s confidence that newspaper advertising works best when it is part of a long term branding program, emphasizing value, and when we project ourselves as newspaper and media professionals. ‘Let’s Make a Deal’ negotiating and ‘Wanna buy an ad?’ just doesn’t work anymore.”

Another paper had a more positive outlook for the program: “We introduced BIGTNDEALS.COM in March 2013 and we are starting to grow revenue. It’s a slow process with a large learning curve.”

When asked which sector of advertising is the most challenging, the answers ran the full gamut of categories, including classifieds.

Currently, community newspapers believe their top competitor to be direct mail, 32.5 percent. The next closest competitor was radio at 23.9 percent. A nearby daily or a website or other digital competitor were tied at 22.2 percent. For the community papers that answered this survey, TV advertising came in last at 9.4 percent.

To continue their profitability, the majority of these newspapers, 34.1 percent have increased their ad rates across the board during the past five years to keep pace with inflation. Twenty-six percent said they have increased some categories, but not others. And 27.1 percent said they have not increased their rates in five years.

Annual contracts help lock in advertisers. The majority of those who answered the survey, 46.1 percent, said they get signed, written contracts each year. About 30 percent said they use oral agreements.

The creative strategies community newspapers use to help hold onto valued advertisers are varied and easy to implement. Here are some of the ideas provided in the survey, not in any particular order: 

  • Enhanced or great customer service (personal one-to-one contact).
  • Discount packages or contracts for frequent advertisers.
  • Directories that are also on the paper’s website with links to the businesses.
  • Using advertising research (either by a private company or NNA’s Readership Survey).
  • Free or discounted color.
  • Discounted first-time contracts.
  • Special sections or glossy magazines.
  • Prepaid discounts.
  • No extra charge for premium page placement.
  • Combining print and online deals.
  • Booster pages (ads that thank the advertisers).
  • Social media combinations with online contracts.
  • Enhanced distribution channels—tablet, website, e-editions.
  • Adding a total market coverage product.
  • Changing sales commission percentage to boost incentive to sell more.
  • Extra distribution at various times during the year.
  • Having a good, solid, local product.

One publisher noted: “We took good, long-term advertisers and approached them with an excellent price for going to full-page ads, in full color, in premium placement, for a 52-week agreement. We have had great success with our auto dealers, our home improvement centers and at one time, we had a real estate company doing full pages every week. The impact for the advertiser has been huge! One client is up 60 percent as a result.”


TMC or shopper

When asked if a newspaper published a regular non-subscriber publication, 44.3 percent of the respondents said they offer a shopper that saturates or nearly saturates the paper’s primary market. About 30 percent have some sort of total market coverage publication, and 24.6 percent said they had either a shopper or TMC, but discontinued it.

One publisher noted that the paper had started a TMC to get more inserts from national companies, but discontinued it because it was too much work for such a small staff. Others who had stopped their shoppers said it was because revenue dropped off. One publisher said the shopper just took ads out of the regular paper. Some of the respondents noted that increased postal costs forced them to drop their TMCs.

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