With global newspaper print advertising on pace for worst decline since recession, publishers cut costs and restructure
Global spending on newspaper print ads is expected to decline 8.7% to $52.6 billion in 2016. Photo: Alan Berner/The Seattle Times/Associated Press
Newspapers are suffering an accelerating drop in print advertising, a market that already was under stress, forcing some publishers to consider significant cost cuts and dramatic changes to their print and digital products.
Global spending on newspaper print ads is expected to decline 8.7% to $52.6 billion in 2016, according to estimates from GroupM, the ad-buying firm owned by WPP PLC. That would be the biggest drop since the recession, when world-wide spending plummeted 13.7% in 2009.
That decline is hitting every major publisher, increasing pressure on them to boost digital-revenue streams even faster to make up for lost revenue and, in some cases, even reconsider the format of their print products and the types of content they publish.
Many newspapers have trimmed costs to cope with the worse-than-expected revenue decline. The New York Times Co. and Wall Street Journal-owner News Corp, likely have further head-count reductions on the way, and the Guardian and the U.K.’s Daily Mail recently eliminated jobs. Analysts such as Jefferies & Co. have pared back their third-quarter estimates for publishers including the Times and Gannett Co.
“We operate in a time of rapidly changing market conditions, especially in the world of print advertising,” Gerard Baker, editor in chief of The Wall Street Journal, wrote Wednesday in a memo to employees. “These are days of accelerating change in the newspaper business.”
In light of the steep downturn, the Journal this week announced a coming revamp of its print editions that will include the consolidation of sections and other cost reductions, moves designed to make the print newspaper more sustainable for the long haul and help accelerate the newsroom’s digital transformation. Meanwhile, the Times has been working on a strategy to significantly boost digital revenue by 2020, including shifting more resources into digital initiatives and looking at ways to revamp things such as its Metro section.