Friday, August 22, 2008

Ad revenue declining

My previous article has quite a few interesting graphs! (Inventory, sales, mortgage stats.)

One item I predicted a long time ago (mostly on HBB comments) was a decline in ad revenue. Traditionally, the 'rule of thumb' of a large established industry is to spend ~25% of revenue advertising (note: This can be a fancy store front, no necessarily TV or Radio time and is distributed between the manufacturer and the retailer.). For example, Beer, Cars, soap, and many other consumer goods.

Last week Gannett announced that they were cutting 1,000 jobs because of a decline in revenue.

Ouch. The article puts the blame on Craigslist for the decline of newspaper ad revenue. I think its due to the recession with hard times pushing businesses to Craigslist as a last resort (due to lack of revenue to fund traditional advertising).

Got Popcorn?

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