NEWSPAPER AD SPENDING ON TARGET

Advertising

NAA Expects 6% Increase For The Year

Growth of advertising spending in newspapers cooled considerably during the third quarter but remains on track to yield a 6% annual increase, the Newspaper Association of America says.

Total spending on newspaper advertising rose 3.4% to $10.5 billion during the quarter that ended Sept. 30. National paced the growth, vaulting 5.9% to $1.4 billion. Classified gained 3.2% to $4.3 billion. And retail notched up 2.9% to $4.8 billion.

"The third quarter was affected by world financial events, such as the Russian devaluation and the growing Asian contagion, along with the ongoing domestic political drama," says NAA Chief Economist Miles Groves. "With much of that behind us, we likely will see a stronger year-end, bringing newspaper advertising spending into the 6% growth range."

Nonetheless, the rate of increase in newspaper advertising expenditures has slowed since the start of the year. Newspaper ad spending grew 7.3% in the first quarter and 6.2% in the second quarter.

For the first nine months of 1998, advertising spending in newspapers grew 5.6% to $30.9 billion. Again, national advertising, which accounts for about 13% of newspaper advertising spending, outpaced other categories, vaulting 8.2% to $4.3 billion. Classified grew 6.5% to $12.5 billion. And retail notched up 4.5% to $14.1 billion.

NAA says last year's record results make advertising spending gains this year seem small. "In retrospect, 1997 was just a peak year," says NAA president and CEO John Sturm. "This year is a more average situation. But the markets came back, which is positive going into the fourth quarter. People once again feel they have more money to spend."

More detailed statistics show that help-wanted ads remain strong. NAA's statistics show recruitment advertising up 4.5% to $1.87 billion in the quarter. Year-to-date, help wanted vaulted 10.6% to $5.46 billion.

Contrary to fears about fallout from the Asian economic meltdown, financial advertising was strong, up 29.4% on the quarter to $626 million and 27.9% for the year to $2.4 billion.

And the hand-to-hand combat in Washington turned out to be a boon to newspapers. Political ads brought in $45.8 million during the 3rd quarter, up 40.7% from last year. Year-to-date, political ads are up 25.8% to $138 million.

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Robert Neuwirth is an associated editor for Editor & Publisher magazine.


KEYWORDS: Advertising spending, forecasts