Mainstream print media auguring into the tarmac

Erick Schonfeld, writing at TechCrunch, highlights the death spiral of the mainstream print media ("Newspaper Death Spiral Continues; Industry Advertising Contracts $5 Billion So Far This Year"):

The newspaper industry in the U.S. continues to shrink at an alarming rate. According to the Newspaper Association of America,, total industry advertising (both print and online) in the third quarter was $8.9 billion, down 18 percent from the year before. The online portion of that was $750 million, down 3 percent. So far in the first three quarters of 2008, the industry’s total advertising revenues have shrunk by $5 billion to $27.8 billion.

Print advertising has been declining for ten straight quarters, but this marks only the second quarter that online advertising also went down. More concerning is that the overall rate of decline seems to be accelerating, a trend we noted in September. Here is the percentage change in total newspaper advertising for the past five quarters:

    3Q07: -7.4%
    4Q07: -10.3%
    1Q08: -12.85%
    2Q08: -15.11%
    3Q08: -18.11%

The fourth quarter will probably be worse.

Probably? Erick's an optimist.

One of the commenters asserts that some offline marketers remain healthy:

I work with Valpak, which mails half a billion envelopes filled with coupons to homes throughout North America, Canada and Puerto Rico and business is better than ever. I am seeing lots of local businesses cut newspaper, magazine display, etc… but actually increasing their spending on trackable media like direct mail coupons and search engine marketing. It’s hard for a business owner to cut a profitable ad in an economy like this when they know how much monthly traffic they would lose if they did. Newspapers can’t show a hard return like that justifies the budget dollars they’re asking for and that’s why (aside from steadily declining readership) they’re losing their shirts in this economy….imho.

Put two and two together and you arrive at this: Google is trading at fire-sale prices if your investment horizon is five years or more.

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