Are Your Wasting Your Money in the Newspaper?

Analysis: Newspapers Are an Overvalued Medium; Radio is Under-valued

Of the many criteria media planners use to determine the underlying value of a medium, consumer engagement is emerging as one of the most important. Agencies and the media may debate exactly how to measure such engagement, but one common ingredient is the amount of time consumers spend using a medium. On that basis, daily newspapers appear to be commanding a disproportionate value from Madison Avenue, while Radio appears to be grossly undervalued, according to a MediaPost analysis of industry data.

The average consumer is projected to spend 173 hours reading daily newspapers in the U.S. during 2003, according to the 2003 edition of Veronis Suhler Stevenson's Communications Industry Forecast. Advertisers, meanwhile, will spend a projected $52.4 billion advertising in newspapers, second only to TV's $56.3 billion. Based on those figures, advertisers are shelling out $303.1 million for every per-capita hour consumers spend with newspapers, a huge margin over any other medium.

By comparison, advertisers will invest one-tenth that amount -- $32.6 million -- for the per-capita hours consumers spend with TV. In fact, print media, which overall generates the least amount of time with consumers, reap a disproportionate amount of advertising budgets. Magazines, for example, generate only 123 hours per person per year, but will attract $11.3 billion in advertising budgets. That's a yield of $92.2 million for every per-capita hour, or three times the yield of television and more than twice the yield of the average of the major media. The Internet and Radio yield $39.4 million and $20.2 million per consumer hour respectively.

This kind of imbalance can continue only as long as advertisers don't understand the value they're missing out on by putting their dollars into newspaper instead of Radio.

Source: Media, September 2003

Competitive Media Update: Newspaper Ad Spending

Newspaper advertising expenditures for the fourth quarter of 2001 totaled $12.3 billion, a decrease of 11.9 percent from the same period the year before, according to preliminary estimates from the Newspaper Association of America. Total ad spending in newspapers for 2001 was $44.3 billion, down 9 percent from 2000.

Retail advertising in the fourth quarter fell 6.2 percent to $5.9 billion, national advertising fell 10.7 percent to 7 billion, and classified advertising — newspapers’ mainstay — plunged 18.5 percent to $4.7 billion.

Within the classified category, real estate and automotive showed gains in fourth-quarter 2001; however, recruitment was in free fall, dropping 46.5 percent for the quarter to $1.3 billion. All other types of classified ads collectively declined 5.4 percent to $728 million for the quarter.

Source: MediaPost.com, 3/5/02