1. KubasPrimedia
Preview 2012
Newspapers’ Outlook on Ad Revenue Growth and Strategic Initiatives
By Ed Strapagiel
29 November 2011
KubasPrimedia surveyed over 400 daily newspaper executives and managers on their
expectations for advertising revenues and what strategic initiatives they intend to undertake in
2012. The survey was conducted in November 2011, when plans and budgets for the coming
th
year would have been substantially in place. This is our 6 annual Preview study.
Highlights
2011 Disappoints
Just over half of newspapers may not be achieving their 2011 budgets because advertising
revenues have been worse than expected.
2012 Ad Revenues: Lowered Expectations
Strong growth in digital ad revenue is expected in 2012, but all other categories are projected
to be flat or down.
Large U.S. newspapers (100,000+ circulation) are relatively more pessimistic.
2012 Operating Initiatives: Digital is the Big Thing
Strong majorities plan to start or upgrade content delivery on mobile devices and to improve
their website for online visitors.
Other important initiatives include controlling costs, erecting pay walls, and starting specialty
products.
2012 Advertising Sales Initiatives: More Digital
Majorities have definite plans to expand email, mobile or e-reader digital advertising, to
improve website advertising programs and options, and to upgrade digital sales capabilities.
Two other important areas of attention are upgrading print sales capabilities and improving
ad pricing and rate structures.
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2. 2011 Disappoints
In the Preview 2011 study conducted 12 months ago, newspaper executives and managers
expected stabilization of ad revenues this year. Out of 8 ad revenue sources, 4 were expected to
increase on net, and the other 4 were projected to show smaller declines than previously.
It seems things didn’t turn out that way.
2011 Ad Revenue
80%
Worse than expected About as expected Better than expected
60%
40%
20%
0%
All US US US US Canada
Total 100K+ Circ 25-99K Circ Under 25K Circ
Overall, 53% said that 2011 ad revenues are worse than expected, and only 12% claim things
are turning out to be better than expected. In other words,
Total 2011 ad revenues are falling significantly short of year ago expectations;
About half of newspaper operations may not make their budget numbers this year.
The largest (100K circulation and over) U.S. newspapers are the hardest hit, with 61% saying
2011 ad revenues are coming in worse than expected. The level of disappointment declines only
slightly with circulation size. Among U.S. newspapers of under 25,000 circulation, 45% still note
that current ad revenues are worse than expected. General results are similar for Canadian
newspapers, except that marginally more (18%) claim that 2011 ad revenues are turning out to
be better than expected.
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3. 2012 Ad Revenues: Lowered Expectations
Perhaps due to the poor experience of the current year, ad revenue expectations for 2012 have
mostly taken a pessimistic turn.
Change in Ad Revenue Expectations
Preview 2011 Preview 2012
++ ++
Digital Digital
+ +
Retail Display
Automotive Classified
Automotive Classified
Distribution
Distribution
Employment Classified o o Retail Display
National Display
Employment Classified
Real Estate Classified Real Estate Classified
Other Classified Other Classified
National Display
- -
-- --
++ Large Increase + Small Increase o About the Same - Small Decrease - - Large Decrease
Only one category – digital – is expected to show significant ad revenue growth in 2012. About
53% expect a large increase and a further 39% forecast a small increase. This is essentially the
same outlook for digital as in last year’s Preview study.
Expectations for all other categories however are in decline for 2012 compared to last year.
Ad revenue gains in automotive, distribution, and retail display should be about flat, while
employment, real estate, other classified, and national display ad revenues are projected to
decline on net. In the case of national display for example, 44% of newspaper executives and
managers expect lower ad revenue in 2012, against just 13% who foresee an increase.
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4. 2012 Ad Revenue Expectations
++ Large Increase + Small Increase o About the Same - Small Decrease - - Large Decrease
All United States Total Canada Total
++ ++ ++
Digital Digital Digital
+ + +
Distribution
Automotive Classified Automotive Classified
Retail Display
Distribution Retail Display
o o o Real Estate Classified
Retail Display Employment Classified
National Display
Employment Classified Distribution
Automotive Classified
Real Estate Classified Other Classified
Employment Classified
Other Classified Real Estate Classified
Other Classified
National Display National Display
- - -
-- -- --
US 100K+ Circulation US 25K-99K Circulation US Under 25K Circulation
++ ++ ++
Digital
Digital
Digital
+ + +
Automotive Classified Retail Display
Automotive Classified Distribution
Employment Classified
o Retail Display o o Automotive Classified
Retail Display
Distribution Employment Classified
Distribution
Employment Classified Other Classified
Other Classified
Other Classified National Display
Real Estate Classified
Real Estate Classified Real Estate Classified
National Display
National Display
- - -
-- -- --
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5. There are some differences by country and newspaper size.
Smaller circulation U.S. newspapers (under 25K) appear to be not quite as pessimistic,
calling for less severe declines in the weakest areas like national display and real estate, and
perhaps even a small gain in retail display.
Mid-sized U.S. newspapers are somewhat more bullish than average on their prospects in
digital.
The largest U.S. papers (100,000+ circulation) have lower than average expectations in
practically every ad revenue category.
Canadian newspapers are more positive on distribution and national display, but more
negative in all classified categories, as compared to U.S. newspapers.
In general, digital is seen as the top growth area across the board by a large margin. There is
perhaps just one other ad revenue source seen as slightly positive, offering an “outside chance”
of revenue gain. But at every type of newspaper, declines are expected in most ad revenue
categories.
2012 Operating Initiatives: Digital is the Big Thing
About 70% of newspapers have definite plans to start or upgrade content delivery on mobile
devices and to improve their website for online visitors. Other popular 2012 operating initiatives
include controlling or reducing both staff and non-staff costs, charging readers for digital content,
and starting a new niche product.
2012 Operating Initiatives
Start or improve content delivery on mobile devices
Improve our website for online visitors
Control or reduce non-staff costs
Control or reduce staff costs
Charge readers for digital content
Start a new specialty, niche, or lifestyle product
Reduce current specialty, niche, or lifestyle products
Reduce current zone, EMC or TMC products
Start a new zone, EMC or TMC product
Reduce publishing days per week
Outsource distribution operations
Outsource printing operations Have com pleted
Format reduction to narrower width / shorter cut-off Definite plans
Upgrade existing or install new printing presses Considering
60% 40% 20% 0% 20% 40% 60% 80% 100%
Only about 20% or less are even considering upgrading presses, (further) format reduction,
outsourcing printing or distribution, or reducing publishing days per week.
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6. 2012 Operating Initiatives Planned or Considered
Start or improve content delivery on mobile devices
Improve our website for online visitors
Control or reduce non-staff costs
Control or reduce staff costs
Charge readers for digital content
Start a new specialty, niche, or lifestyle product
Reduce current specialty, niche, or lifestyle products
Reduce current zone, EMC or TMC products
Start a new zone, EMC or TMC product
Reduce publishing days per week
Outsource distribution operations
Outsource printing operations
US 100K+ Circultion
Format reduction to narrower width and/or shorter cut-off US 25 -99K Circulation
US Under 25K Circulation
Upgrade existing or install new printing presses Canada
0% 20% 40% 60% 80% 100%
While the general line up is about the same, operating initiatives for 2012 vary somewhat among
newspapers.
The largest U.S. papers (100K+ circulation) are more likely to be considering pay walls,
reducing peripheral publications, outsourcing printing or distribution, and format reduction.
Mid-sized U.S. newspapers (25K to 99K circulation) are slightly more interested in controlling
non-staff costs.
The smallest U.S. newspapers (under 25K circulation) are relatively less concerned with cost
control, although it’s still among their top 5 issues.
Canadian newspapers are more likely to start a new specialty, niche or lifestyle product, and
the least likely to reduce their existing line up of these publications.
2012 Advertising Sales Initiatives: More Digital
Majorities of 65% to 70% have definite plans to expand email, mobile or e-reader digital
advertising, to improve website advertising programs and options, and to upgrade their digital
sales capabilities. Two other strong areas of attention are upgrading print sales capabilities (53%
with definite plans) and to improve ad pricing and rate structures (42% with definite plans).
Most initiatives are on the radar for a least a third to a half of newspapers. The one exception is
outsourcing ad sales operations, although 10% are considering it.
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7. 2012 Advertising Sales Initiatives
Expand email, mobile or e-reader digital advertising
Improve programs & options for website advertisers
Improve ad pricing and rate structures
Upgrade digital sales via training or new hires
Upgrade print sales via training or new hires
Start or upgrade online self-serve ad sales
Upgrade external ad sales technology and processes
Increase preprint distribution volume
Eliminate or cut back discounts and deals
Upgrade the internal ad booking and billing system
Offer finer geographic targeting for preprints
Adopt modular ad sizing and pricing Have com pleted
Outsource advertising production operations Definite plans
Outsource advertising sales operations Considering
40% 20% 0% 20% 40% 60% 80% 100%
2012 Advertising Sales Initiatives Planned or Considered
Expand email, mobile or e-reader digital advertising
Improve programs & options for website advertisers
Improve ad pricing and rate structures
Upgrade digital sales via training or new hires
Upgrade print sales via training or new hires
Start or upgrade online self-serve ad sales
Upgrade external ad sales technology and processes
Increase preprint distribution volume
Eliminate or cut back discounts and deals
Upgrade the internal ad booking and billing system
Offer finer geographic targeting for preprints
Adopt modular ad sizing and pricing
US 100K+ Circultion
Outsource advertising production operations US 25 -99K Circulation
US Under 25K Circulation
Outsource advertising sales operations Canada
0% 20% 40% 60% 80% 100%
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8. In general, larger newspapers have somewhat more initiatives planned or under consideration
than smaller publications. There are also differences in priorities among newspaper types.
The largest U.S. papers (100K+ circulation) are more likely than average to be pursuing
increases in preprint distribution volume, adopting modular ad sizing and pricing, outsourcing
advertising production, and even considering outsourcing ad sales..
Mid-sized U.S. newspapers (25K to 99K circulation) are relatively more likely to be
considering finer geographic targeting for preprints.
The smallest U.S. newspapers (under 25K circulation) are relatively less likely to be
considering finer geographic targeting for preprints.
Canadian newspapers are relatively less interested in improving ad pricing and rate
structures, upgrading print sales capabilities, and eliminating discounts and deals.
About Preview 2012
The survey for KubasPrimedia’s Preview 2012 study was conducted online with newspaper
executives and managers in November 2011, when plans and budgets for 2012 would have
been substantially in place. Participant invitations were sent to both U.S. and Canadian
newspapers. The survey was conducted on a confidential basis.
A total of 436 survey replies were received. A normal probability sample of this size has a
maximum statistical error of plus or minus 4.7% at the 95% confidence level, or 19 times in 20. A
breakdown of survey respondents is as follows.
Preview 2012 Survey Respondents
Weekday Circulation U.S. Canada Total
100K+ Circulation 98 29 127
25K - 99K Circulation 150 15 165
Under 25K Circulation 101 35 136
Circulation not stated 4 4 8
Total 353 83 436
Relative to the number of publications, survey results under-represent small newspapers, but as
a consequence may better reflect advertising revenue distribution by circulation size.
Thank you very much to all those who participated in the Preview 2012 survey!
Ed Strapagiel (eds@kubas.com) is Executive Vice President of KubasPrimedia (formerly Kubas Consultants), a firm
specializing in newspaper pricing structures, revenue development, and publishing strategy. For more articles and
ideas on newspaper ad sales and marketing, visit www.kubas.com.
© Copyright KubasPrimedia. All rights reserved.
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