2010 Newspaper Ad Revenue is Fool’s Gold

February 28, 2010

You heard it here first!

Political pundits and financial officials are now telling us that the recession is coming to a close. They say that the worst is over and that businesses are going to start making money again soon. It is inevitable that the local newspaper industry will latch onto this news and assume that with this upturn in the economy, all of the industry’s woes will begin to fade away. In fact, I guarantee that articles will be published in the next few months (if not sooner) claiming that local newspapers are now stabilized and safe from harm. Owners will start meeting up at industry conventions and patting each other on the back in congratulations for their salvation. And what’s more, I think that the industry will, in fact, see a slight increase in ad revenue as the greater economy starts to pick itself up and brush the dust off its ankles.

But don’t believe for even one second that any of this means that the local newspaper industry is headed for a major turn around. There are multiple reasons why the industry has been in decline, and the recession is only one of them. In fact, the recession is only a minor worry for newspapers compared to the more systematic problem: the fact that a huge demographic of people who used to look in the classifieds for a job, in the personals for a date, and in the real estate ads for a home; now go to monster.com, craiglist, and zillow for these services. Even as a turn around in the economy provides temporary relief by way of improved ad revenues, local newspapers will still continue to bleed readers. The overall trend is still a steep downward slope; this temporary change is only a brief plateau.

The small increase in ad revenue that local newspapers can expect in 2010 cannot then be taken as a sign that the old legacy model is still working. Rather, the local newspaper industry needs to take this brief opportunity to start formulating a plan to stem the bleeding. This means concentrating on the ways that local newspapers serve their communities, which would be impossible for giants like craigslist to compete with. Local newspapers have a built in community that is naturally more in tune with local issues than any globally based social network could ever hope to be. But they need to adapt to the new ways that people access information and connect with one another to continue fulfilling their traditional community based functions.

The worst thing that local newspapers can do right now is to simply ignore the fundamental changes taking place in media and attempt to rely solely on the upcoming minor improvements in ad revenue for their salvation. These new profits are fool’s gold, and should be taken for what they are: temporary. Sure, any extra profit should be welcomed, but we should not let it distract us from what our primary question still needs to be: what would the local newspaper industry look like if it where invented today?

Think Outside the Newsstand,

Joe

Photo credit ToOliver2

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