Financial markets crisis to hit newspapers hard
A new report from Bernstein Research out today predicts the financial markets crisis will hit newspapers particularly hard. As reported in Media Post, some 21 percent of newspaper ads - particularly for national brands like The Wall Street Journal and USA Today – come from two main sectors: finance and insurance/real estate. That’s greater than their overall share of the U.S. ad market – 6 percent for the financial segment and 4 percent for insurance/real estate.
The two segments have also been responsible for a significant chunk of ad growth over the past four years, at 23 percent of total growth, according to Bernstein.
However, different sectors have driven growth at various periods. For example, pharmaceuticals and mobile phones dominated earlier in the decade. "History suggests that another industry will eventually fill the growth void left by the insurance/real estate and finance sectors, but the operative word is clearly 'eventually,'" wrote the report's author, analyst Michael Nathanson.
Finance is the fourth largest ad category, behind auto, retail and media/entertainment.
The collapse the Wall Street banks at the center of the turmoil isn’t expected to directly impact the ad market. Banks like Lehman Brothers and Wachovia accounted for just .3 percent of U.S. ad spending, Bernstein reported.
Nevertheless, the coming months, if not years, stand to further exacerbate the already tenuous position in which newspapers have found themselves.
