30
December
2016

The Downturn of Newspaper Ad spending – Y.O.Y. & Holiday 2016 Review

For quite some time now, the newspaper market has been under stress due to the rapid and recurring advent of the digital media platform. Currently, newspapers are trying to cope with the accelerating drop in print advertising. GroupM estimated the overall decline in newspapers by 8.7% to US $52.6 billion in 2016. The future of print advertising at this point of time appears to be rather bleak.

 

The Shift in ‘Ad-spending Trend’

 

The rise and popularity of the digital media has ensured that the newspaper market takes a beating. The primary reasons why marketers have shown reluctance in print advertising are – declining circulation and aging readership. GroupM estimated that in 2016, the global ad market will grow by 4% to US $529.1 billion with a 14.1% acceleration in digital ad spending. These are worrying signs for print advertising. Zenith Optimedia, a French advertising agency, predicts that by 2019, the global social media advertising expenditure will hit US $50 billion accounting for 20% of all internet advertising and just 1% smaller than newspaper ads. They also predict that social media will easily overtake newspapers by 2020. The following illustration clearly denotes the shift in trends in global ad spending over the years and also projects the estimated figures by 2017.
 

ad-spending-trend

Apart from funding their respective digital initiatives, the growing reluctance of marketers to spend on print ads is due to the diminishing return on investments. The cost of print ads easily outweighs the overall performance that marketers expect in return. Currently, social media advertising and online video advertising seem to be the way to go, and are likely to be that way for the better part of the time to come. Online video advertising is set to grow to US $35.4 billion globally by 2019. These are various reasons why marketers across various sectors including Retail, are reducing their expenditure on print advertising.

 

Holiday 2016 – ‘Retailers abandoning newspapers’

 

The consistent decline in newspaper circulation, along with the growing trend of online holiday shopping have meant that retailers have cut down their expenditure on print newspaper advertising this holiday season as well. There has been as much as 30% decline on newspaper ads expenditure by retailers this holiday season, which is by far the biggest in the last four years (Kantar media). In 2015, the decline measured stood at 15%. This means that the decline has doubled from that of last year.

 

Newspapers have always been dependent on a few advertiser groups for their source of advertising revenue. Retailers definitely are one of the advertiser groups. The reasons why retailers are showing reluctance in newspaper is due to the overwhelming emergence and popularity of shopping through the digital medium, specifically the mobile medium. Besides, as mentioned earlier, the overall return on investment from print ads is not great either. The following illustration tells a story about the diminishing trend of newspapers this holiday season.


diminishing trend newspapers

The above figures (excluding the expenditure data on paid search, online video and mobile medium) clearly depicts that between the period of November 21st – December 11th , when newspaper were included, there was an overall drop in the holiday media expenditure by 13%. Without newspapers, the overall drop registered was 3%. This gives a clear indication as to how retailers are approaching their advertising campaigns with regards to choosing the relevant and appropriate medium.

 

In more ways than one, it is safe to claim that retailers this holiday season, have abandoned newspapers.

About Shakuntala Sarkar

Shakuntala is a marketer with 15 years of experience in Marketing Strategies & Operations, Brand Communications, Customer Relationship Management and Corporate Communications. An economics graduate from St Xavier’s college, Kolkata and a IIMC she, has worked across different industries like IT & Retail, with consumer marketing in both B2B and B2C segments. Before joining Tickto, she was the Head of Customer Relationship Management at Spencer’s Retail. Prior to that, she has been a part of the Global Marketing & Communications team of Satyam Computer Services.

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