Regional papers beat slump

NEW research has shown regional, suburban and non-daily newspapers' revenue grew markedly last year.

The research, issued by the Commercial and Economic Advisory Service of Australia (CEASA) bureau, showed advertising revenue in the segment grew by 6.8%.

That compared with daily metropolitan newspapers which fell markedly.

The overall newspaper segement rose by just 1 per cent.

Figures provided to The Australian by CEASA show metropolitan television advertising fell 4.5 per cent, outdoor spending declined by 4.1 per cent and radio was down 3.4 per cent in the second half of last year compared with the same period in 2007.

The figures, which are much lower than those recorded over the full calendar year, indicate the speed at which advertisers cut their spending after a strong June half.

For the full 12 months to December, outdoor spending rose by 4 per cent, radio was up marginally and metropolitan TV was down 2.4 per cent.

The CEASA data - which showed that the rate of growth for all media slowed from 3.7 per cent throughout the 12-month period to 1.2 per cent in the six months to December - coincided with calls for the federal Government to develop a "private sector stimulus package" to help advertisers stimulate consumer spending.

"Unlike the recession of 1983, which was a period of high interest rates ... many of us have money to spend," said Scott McClellan, chief executive of the Australian Association of National Advertisers.

"If advertisers can be encouraged to maintain or increase their ad spend, the stimulus on consumer demand could significantly reduce the local impact of global recession," Mr McClellan said.

He quoted a 2003 Boston Consulting Group study in Germany that found advertising was particularly effective in stimulating competition in times of recession. In contrast, where advertising investment was weakest, economic growth was also poor.

"We think there is an opportunity to work with the federal Government to encourage advertisers to maintain or increase ad spend to help fuel the economic recovery," Mr McClellan said.

Meanwhile, CEASA managing director Bernard Holt said the outlook for cinema, the internet and pay-TV, as well as regional and suburban newspapers, was positive despite the slowdown.

"Unquestionably things have slowed down this year but not for all media," Mr Holt said.

"Cinema''s going to be all right. Pay-TV has slowed a little."

Newspaper advertising grew slightly, with a 1 per cent increase over the year held back by a 0.8 per cent decline between July and December.

"Regional and suburban newspapers are going to be all right," Mr Holt said. "The non-dailies also. They''re a citadel unto themselves."

He predicted that while spending on free-to-air TV had dropped markedly, it would recover in the years ahead. "It''s still a very strong medium."

Nick Keenan, head of print at media agency Mediacom Sydney, said that while newspaper advertising could drop further, it was still a "mass reaching medium" and would "continue to attract the lion''s share of the ad spend as a result".

- Lara Sinclair, The Australian (6 April 2009)