In my November 23rd blog post, Dinosaurs Didn’t Adapt, But You Should, I talked about the impact that social media is having on local media news outlets, specifically metro newspapers. But what about local newspapers? If major metros, like the Rocky Mountain News, Cincinnati Post and Baltimore Examiner, had to shut their doors due to increased pressure from online media outlets, what are the odds of local, community newspapers surviving this threat to their existence?
Newstands gathering dust in San Francisco. A sign of our times.
As FierceContentManagement editor Ron Miller noted in his January 5th column, Why local newspapers still matter (a lot), there is definitely an important place in the world for local newspapers. Large daily metros don’t have the resources available to cover all of the important news in anyone’s town. Personally, part of my morning ritual is to eat breakfast while reading the local paper. But while the threat of online news and social media continues to eat away at profits for local papers, how will they be able to survive as advertising revenue continues to decrease? Remember, it’s the ad revenue that covers the costs of running a newspaper, not the 25 cents that I pay each day.
Zacks Investment Research had this to say about the downward trend in advertising revenue for newspapers:
The slide in newspaper circulation, which ran through the 1990s and into 2000, is accelerating. Earlier, the circulation of newspaper was falling by less than 1%, but the rate of decline accelerated to 2% in 2005, 3% in 2007 and 4% in 2008 with more and more readers migrating to the Internet. Circulation has also fallen prey to budget cuts with newspaper companies reducing the number of print pages and newsroom staff to combat the downturn.
According to the data released by the Newspaper Association of America, newspaper-advertising revenue tumbled for the 13th straight quarter in the third quarter. Also, 2009 reflected the steepest fall in advertising sales since 1987.
- Total advertising revenue dropped 28% year-over-year to $6.4 billion in the third-quarter of 2009.
- In the first nine months, advertising revenue also declined 28% to $19.9 billion.
- Print advertising revenue plunged 29% to $5.8 billion, with classified advertising revenue down 38% to $1.46 billion.
Similarly, television and radio have been greatly impacted by the changes in media. According to a report written by Vocus Media Research Group (2010 State of the Media), the radio industry also felt the recession this year as revenues for radio stations dropped from the previous year, with estimates ranging from 15 to 20 percent and more than 10,000 jobs were lost. Television didn’t do much better as bankruptcies were common as more than 100 TV stations were affected by their parent companies filing Chapter 11.
So if major metros and even local newspapers are on the chopping block, what are local companies going to do to promote themselves? How can they take advantage of this situation?
In one sense the growth of social media and local online news outlets has provided local companies, such as restaurants and retail shops, with the opportunity to reach their target market like never before. Sure, local companies can advertise online in the local news outlet. But social media tools and local online news outlets give everyone a voice. In order to help build and promote brand awareness, local companies can write their own blog on their Web site, comment on and link to other interesting blogs, promote local events and share company news. This democratization of news is unprecedented in modern history.
While I want to see my local paper remain viable, I think that the rise of social media tools and local online news outlets has dramatically changed the way we absorb and view local news. I’d like to pose the question to small businesses—has the growth of social media and local online news outlets improved or weakened your business?