Advertising revenue is expected to increase, while website enhancements and controlling costs will be the top priorities for newspapers in 2011 according to the fifth annual newspaper preview survey from Toronto-based KubasPrimedia.
Based on interviews with 426 daily newspaper executives and managers across North America–including 73 in Canada–the survey paints a brighter picture for the newspaper industry next year.
Ed Strapagiel, executive vice-president of KubasPrimedia, predicted that 2011 will be a “turn-the-corner kind of year” for newspapers. It won’t be like the glory years, he said, but will help allay some of the gloom that has beset the industry during the past 18-24 months.
“A lot of newspapers have come to grips with the new reality, whereas last year, when the recession hit, a lot of them simply weren’t prepared,” he said. “They’ve had all this time to adjust and do something about it.”
While last year’s report dubbed 2010 “the year of the bottom,” this year’s report indicates ad revenue improvements “across the board,” with the automotive and employment classified categories expected to see the most improvement.
KubasPrimedia is also projecting 18% growth in digital ad revenues next year, although Strapagiel cautions that newspaper executives have tended to be “over-optimistic” in their predictions for the category in the past.
“In past preview studies we’ve always gotten a high number for digital or online… but it’s never been as good as people have hoped,” he said. “I think there’s an ‘Online’s going to save our bacon’ attitude out there.”
The report indicates that newspapers will attempt to increase digital advertising revenues not only via online, but through mobile, tablets, e-readers and related applications. Respondents also identified upgrading sales skills as one of the key sales-related initiatives for 2011.
Many newspaper executives also indicated a strong desire to increase their pre-print advertising volume–flyers, essentially–in the year ahead. Pre-print is “probably worth two to three times more than online ad revenue,” said Strapagiel. “But the attention it gets is miniscule compared to digital. It’s kind of a forgotten aspect of the business,” despite being one ad category that has weathered the recession well.
Meanwhile, eliminating or cutting back on advertiser discounts is “on the radar” for just over half of the newspaper executives who participated in the survey, although most said they are just considering the tactic rather than having definite plans to implement it. KubasPrimedia notes that this could be one of the “toughest” sales challenges for newspapers after “years of dealing and discounting.”
The report also outlines some stark differences between Canadian and U.S. publications. While Canadian newspaper executives are more optimistic about a recovery in both national and retail display advertising, for example, they are more pessimistic than their U.S. counterparts in their outlook for most classified categories.
Among 2011 initiatives, improving their website ranks as the top priority for most newspapers, followed by reducing costs.
The report also indicates that interest in launching a specialty, niche or lifestyle product remains high, with about 30% of publications having definite plans to undertake a venture of this type next year and a further 33% considering it.
While Strapagiel described the trend as “supply push rather than demand pull,” he said that niche titles are a proven way of bringing in incremental ad revenue. The key, he said, is to develop products that won’t cannibalize existing advertising.
Meanwhile, about 15% of publications have definite plans to erect a pay wall in 2011, while an additional 36% are considering it. However, the report also notes that this is the area “with the least consensus” among small and large circulation papers.
