Economist Mark J. Perry – Free-fall: Adjusted for inflation, print newspaper advertising revenue in 2012 was lower than in 1950


Free-fall: Adjusted for inflation, print newspaper advertising revenue in 2012 was lower than in 1950


The Newspaper Association of America (NAA) released its annual report today on American newspaper revenue, and the chart above displays updated advertising revenue data from the report through 2012.

The blue line in the chart above shows the total annual print newspaper advertising revenue(for the three categories national, retail, and classified) based on annual data from 1950 to 2012. The annual advertising revenues have been adjusted for inflation using the CPI, and appear in the chart as billions of constant 2012 dollars. Newspaper print advertising revenues of $18.9 billion in 2012 fell to the lowest annual level of print advertising since the NAA started tracking industry data in 1950. In 2012 dollars, advertising revenues last year were below the $19.75 billion spent in 1950, 62 years ago.

The decline in print newspaper advertising to a 62-year low is amazing by itself, but the sharp decline in recent years is pretty stunning. Print ad revenues fell by almost 50% in just the last four years, from $37 billion in 2008 to less than $19 billion last year; and by 66% over the last decade, from $56.3 billion in 2002.

Here’s another perspective: It took 50 years for annual newspaper print ad revenue to gradually increase from $20 billion in 1950 (adjusted for inflation) to $65 billion in 2000, and then it took only 12 years to go from $65 billion back to less than $19 billion in 2012!

Even when online advertising is added to print ad revenue (see red line in chart), the combined total spending for print and online advertising last year was still only about $22.3 billion, which is the lowest amount of annual ad revenue since 1953, when $22.5 billion was spent on print advertising. The introduction of online advertising in 2003 has helped to increase total ad revenues (print + online) a little bit, but online advertising has remained flat at about $3 billion per year for the last six years, and was actually lower last year ($3.37 billion) than in 2007 ($3.5 billion in 2012 dollars).

Economic Lesson: The dramatic decline in newspaper ad revenues has to be one of the most significant Schumpeterian gales of creative destruction in recent years. And it’s not over. One recent special report from IBISWorld on “Dying Industries” identified newspaper publishing as one of ten industries that may be on the verge of extinction in the United States.

HT: Sprewell