More ad revenues move to the web

Fueling a growing trend, real estate businesses are pulling advertisements from local papers in favor of purchasing space online. Somehow not surprising, newspapers executives attribute the deflated spending on real estate advertisements (estimated decline of 14% during 1Q07 on average, while NYT specifically saw a decline of 16%) to a cyclical slump in the real estate industry. A company representative for Gannett, parent company of colorful chartists USAToday, told Bloomberg, “It’s not our business model people have a problem with (because the American public can’t get enough of the-world’s-tallest-man-meets-the-world’s-shortest-man news). It’s their own — and it’s the economy.” The companies pulling ads, however, don’t agree –and real estate brokers aren’t the only ones pulling advertising dollars. Analysts estimate that ad linage across sector sponsors, including department stores, fell by double digit percentages this year.

Brokerage executives [say] they will shift money to the Internet permanently because advertising is less costly and the Web offers consumers more information…

`If the market turned up, I wouldn’t give the same percentage to print,’ Shuffield [President of Miami-based real estate-ish firm which slashed the overall marketing budget by 9%, but newspaper advertising by 29%] said. `You don’t want to advertise on a stone tablet if everyone has moved on to the Gutenberg press.’” [Bloomberg]

As ad dollars move online, most –we still have the far right tail of the demographic distribution to contend with –paper media will fold (Jane, Red Herring…) or follow suit. Other than the paper contained in books strewn about my apt., I’d be hard pressed to find a full sheet. Considering the three main spheres: office, home and school, the office is the only I’ve experienced in the past five years that hasn’t seen a pronounced drop in paper consumption. Although my office history doesn’t go back farther than five years for comparison, my hunch is that added pdf conveniences brought on by each new version of Adobe may eventually do in the office as well. Coincidentally this year, Weyerhaeuser (NYSE:WY) sold its fine paper business, and Potlatch’s (NYSE:PCH) pulp and paperboard segment is producing y/y losses –both heavily tied to the US/Canada. Other paper/timber companies with an international presence (read: mills in Brazil, revenue streams from BRICs) are still thriving: International Paper (NYSE:IP), Neenah Paper (NYSE:NP).