Newspapers Suffer Most in Ad Dollars Lost to Internet

Newspapers more than other media are losing ad dollars from leading national advertisers, who are shifting budget away from traditional media to the Internet, according to a new report from Wachovia Equity Research, via Editor & Publisher.

By category, in 2006 only financial services advertisers increased spending in newspapers, which have seen less money from the automotive, retail, telecommunications, general services, media, and tech/Internet categories, according to Wachovia.

Additional findings from Wachovia:

* Of the seven categories considered, only one - financial services - increased spending in newspapers in 2006.
* Television, however, had more money flowing in from four of those seven categories: telecommunications, automotive, media and tech/Internet.
* Among the seven categories in the aggregate, newspapers lost 14.3 percent in advertising dollars, and TV gained 4.4 percent. Internet ad spend increased 17.8 percent. Spend in other measured channels decreased 1.1 percent.
* The top telecommunications advertisers shifted the most ad spend away from newspapers: In 2005 they spent 31.6 percent in newspapers, but in 2006 they spent 24 percent.
* In 2005, the top auto advertisers spent 9.2 percent, but just 4.6 percent in 2006, on newspapers.
* Retail advertisers spent 29.8 percent on newspapers in 2005 and 28 percent in 2006.

Internet ad spend growth would need to be 15 percent per year over the next decade to reach the level of ad spend going to newspapers, according to Wachovia.