Stunner: Newspapers may be rebounding

Friday, December 18, 2015

It's a question that's long plagued newspapers: When will advertising finally bottom out?

What was once a $50 billion industry has seen ad spending shrink to under $20 billion, and many forecasters are predicting further contraction, to $15 billion by 2018.

But what if those forecasts are wrong. What if newspaper ad spending has not just stabilized but is actually growing?

That's the suggestion of new numbers from Sysorex, a big data company that looks at trends in advertising through its Shoom analytics.

It finds that in November newspapers saw a 16 percent gain in ad spending over October, the biggest month-to-month gain in six months.

Moreover, it was the third time in the past five months that ad spending rose month to month, and it was driven by a 38 percent gain in retail, which up until October had been cutting back on newspaper spending.

Sysorex notes the big November gain could be tied to retailer optimism about the holiday season. The category usually ramps up newspaper spending in November and December, and forecasters were calling for better holiday sales this year, which always perks up advertising.

Even so, the November gains were uncharacteristically high.

"A month-to-month increase on the order we saw in the retail category in November is unusual; better than we've seen in several years," says Michael Lynch, executive vice president for Sysorex's Shoom services.

Lynch says all but one of the 42 ad categories tracked by Shoom increased last month.

This could be a fluke, a really good couple of months that happened to end the year.

But that may not be the case. There are other signs that things are looking better for newspapers.

Standard Media Index reports newspaper advertising rose 16 percent during third quarter.

And ZenithOptimedia notes that while newspapers face challenges from the encroachment of digital, they appear to have figured out some of their circulation issues.

"Despite the decline in circulation, circulation revenue has increased due to digital paywalls and increased newspaper cover prices," notes the agency's most recent forecast.

This article is part of a Media Life series "Reinventing the American Newspaper." Copyright Missouri Press, All rights reserved.