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Web Ad Spending Jumps 21% for News Properties

According to estimates from the Newspaper Association of America (NAA) advertising spend on newspaper websites jumped by 21.1%, to US$ 773 million in Q3 2007 vs. Q3 2006.

The increase reflects the fourteenth consecutive quarter of double digit growth for online newspaper advertising, a metric NAA has been tracking since 2004. Web advertising now accounts for 7.1% of total newspaper ad revenues, as compared to 5.4 % a year ago.

But the picture ain’t all rosy.

According to NAA’s numbers, the total advertising spend at domestic newspapers was US$ 10.9 billion in Q3 2007, this represents a 7.4% drop from the same period a year earlier. And revenues from print ads in newspapers totaled US$ 10.1 billion, down 9% from the previous year.

The 21% gains on the online side have not made up for the 9% decreased print spend. According to the reported data print classified advertising fell 17% to US$ 3.4 billion and print retail spend declined 4.9% to US$ 5.1 billion.

NAA President John Sturm pointed at “broader economic issues” that were impacting the industry. Major components of the drop in print classifieds were:

• real estate adverts plummeted 24.4%
• recruitment ads dropped 19.7%
• automotive ads fell 17.7%

In related news, the New York times has reported that Murdoch plans to make the Wall Street Journal’s website free, “trading subscription fees for anticipated ad revenue.” And IAB reported that internet ad spending in the US spiked 25% in Q3 2007, hitting a record of US$ 5.2 billion.

Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net)

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