What the numbers really tell us

 By Dave Lindorff

     The American newspaper industry has experienced probably the longest funeral service in recent history. One might think the eulogy was invented for it.
      For two decades the nation’s newspapers have watched circulation slide on average about 1 percent a year. Each year, as the numbers come out, pundits call them out as yet further proof of impending death.
     Things aren’t quite so bad. In fact the numbers, looked at more closely, show the contrary. While circulation numbers overall may be trailing down, in the key markets advertisers care most about readership is actually up. In fact, all the data indicates a shift in the demographics of readership toward the more educated and affluent reader.
      Indeed, for all the grumbling, the $54 billion newspaper industry is quite healthy. Ad rates and revenues are up significantly industrywide.
      In 1998, a year when newspapers lost nearly 0.5 percent in circulation--a good year as things go--they showed a 6.4 percent gain in ad revenue, and a similar gain is expected this year, according to the Newspaper Association of America.   Over the same period the aggregate rate for a one-column inch of display advertising increased by about 3.2 percent, according to Editor & Publisher magazine.
      Moreover, 60 percent of newspapers in the top circulation category of 500,000 or more papers a day--a group that includes USA Today, the New York Times, the Los Angeles Times, the Washington Post, the New York Daily News, the Chicago Tribune and Newsday--saw circulation gains in 1998, according to the Audit Bureau of Circulation.
        Even in the next highest category--papers of 250,000 to 500,000 circulation—43 percent saw gains last year. Most papers in the Sunbelt region and in the nation’s suburbs, where populations continue to grow, saw circulation gains.
     ''One reason newspapers haven't paid much attention to circulation declines for so long is that they've been doing so well,'' argues Mike Smith, director of Northwestern University's Newspaper Management Center.
      Newspapers are not only still widely read but widely read by people advertisers most want to reach. Each day Americans buy 56 million newspapers, and each copy is read by an average 2.33 readers. Some 58 percent of Americans read a newspaper daily. In the higher income and education brackets, that figure is higher yet; 69 percent of people in the $75,000-plus income bracket and 67% of college graduates read newspapers.
      Much of the decline in circulation appears to have come from a shift in readership away from the less educated and affluent.
        ''It is probably true that most of those readers who have been dropping newspapers are not the most important people to advertisers,'' says John Kimball, senior vice president and chief marketing officer of the NAA. ''It's not by accident that retailers put a majority of their ad dollars into newspapers.''
        There's no question that the growth in alternative media--particularly cable TV--has hurt newspapers. Newspapers had 25.1 percent of all advertising in 1990, a figure that fell over the decade, but in 1996 those numbers began to turn, rising from a low of 21.8 percent to a current 22.1 percent. The NAA predicts that newspaper ad revenues will continue to grow at a 4.5 percent to 6 percent pace through 2000, Circulation will stabilize as well.
        During the 1980s, the newspaper industry and many top papers attempted to compete with television in the effort to be more entertaining and more readable. It was a mistake. They lost reader confidence, and the efforts did little to stem a circulation slide.
        Now the industry is engaged in a new readership initiative that aims at attracting back old readers and bringing in younger readers by much more locally targeted marketing. Under the direction of former Coke marketing whiz Sergio Zyman, the NAA wants to strengthen newspapers’ brand recognition in each paper's market.
        ''If newspapers don't capture a significant portion of those people born since 1977, warns Northwestern's Smith, ''they could become like Network TV.''
       But there go the funeral bells again.

-Dave Lindorff is a writer based in Philadelphia.

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