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Community newspapers announce third quarter financial results

Encouraging trends further differentiate the community segment from the metro dailies

Community newspapers continue to experience only a slight downturn in advertising revenues, contrary to industry-wide reported trends, according to third quarter 2008 financial data collected by the trade associations — Suburban Newspapers of America (SNA) and the National Newspaper Association (NNA). The SNA/NNA financial reporting group reports total ad revenue at $394 million, a 1.7 percent decline from the same quarter in 2007. As a point of comparison, NAA has reported an overall decline of 18 percent for the industry in the third quarter.

Hundreds of daily and weekly community newspapers, representing over 10.5 million in circulation with annual revenues of nearly $2 billion, participated in the SNA/NNA financial reporting group for the third quarter. Reports conducted earlier this year by SNA showed a 2.7 percent decline for the first quarter of 2008 against the same quarter of 2007 and a decline of 2.4 percent for the second quarter. Again, significantly better than the overall industry declines reported by NAA of 12.85 percent and 15.11 percent respectively.

“Local advertisers continue to value the hyper-local news and desirable local audience provided by community newspapers,” said SNA President Nancy Lane, “Community papers are affected by the current economic downturn but they are not in a crisis; in fact, there are some that are showing growth.”

As three quarters of results from the SNA financial reports would indicate, community newspapers are not experiencing the massive ad revenue declines that are being felt by some others in the industry. And they are not reducing staff in significant ways. In fact, 83 percent of the reporting companies have no planned staff reductions in 2008.

“It’s encouraging to see that national and regional advertisers are discovering what we’ve proved week after week for more than a century: community newspapers are the most effective, efficient and trusted source for communicating with readers and buyers,” said NNA President John Stevenson, publisher of the Randolph Leader in Roanoke, AL. “Local retailers, service providers and advertisers have always, and continue to recognize that their hometown Main Street newspaper is their most successful connection to readers and their customers.”

Once again, the variance explanations are economy-driven. Community newspapers are experiencing slight declines in advertising revenue mainly due to classified categories that have been hard hit by the slumping economy. In many cases, they have made up much of those losses on the retail and preprint side. Large retailers, for example, have added many community papers to their buy in the last few years to increase their preprint penetration in key markets.

Suburban Newspapers of America is a trade association representing nearly 2,400 daily and weekly newspapers in the United States and Canada. SNA has experienced seven years of record growth — another indication of the strength of this segment of the industry. LocalPoint Media, a new national network managed by SNA’s for-profit subsidiary, placed $400,000 in 2008, representing all new national business for the community newspaper industry. For more information, www.suburban-news.org, www.snalocalpapers.com and www.localpointmedia.com.

Note about the third quarter report: financial data was tracked for all products published except dailies over 100,000 (although most SNA and NNA members do not publish papers in this size range). Due to the wide variety of reporting procedures, only total advertising was tracked. Category variances were explained in open-ended fields.

For more information, contact Nancy Lane, President, Suburban Newspapers of America at (843) 390-1531 or nancy.lane@suburban-news.org.