The US newspaper industry is facing some very bad news: growth in digital ad revenue is declining. A story published by Reuters today states that, according to statistics from the Newspaper Association of America, digital ad revenues at newspapers are up just 1% from a year ago, making this the fifth quarter in a row that growth has dropped.
Reuters reports that online ad revenues at the New York Times Company experienced a 2.3% drop to $48 million in the first quarter, compared to the same period the year before. At the Washington Post Company, online ad revenue fell 7% to $24.2 million, the article says.
What’s going wrong? Reuters says that experts blame the existence of too much advertising space online, the rise in discount-rate ad spots, and a tough economic climate in the US for the slowdown.
When the New York Times Company originally announced its decline in digital ad revenue, paidContent reported on an earnings call with CFO James Follo, who “explained that digital ad sales have long been insulated from macro-economic events. Starting in 2011, however, these ad sales began to be sensitive to the European debt crisis and other events that affect print ad sales.”