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Newspaper Advertising Looks to Gain Momentum in 2003, Says NAA

Wednesday, January 08, 2003

Press release from the issuing company

Jan. 7 -- Newspaper advertising should improve by at least 3.2 percent and possibly as much as 6.1 percent in 2003, according to estimates from the Newspaper Association of America. After rebounding to positive year-over-year comparisons in 2002's third quarter, the trend should continue with the fourth-quarter numbers and into 2003, writes NAA Vice President of Business Analysis and Research Jim Conaghan, in "The Overhang of Uncertainty," a 2003 forecast in the January issue of NAA's Presstime magazine. “The advertising recovery currently under way means that although spending declined sharply in 2001, conditions are improving a little more rapidly than they did in the last downturn in 1990-1991. Performance in 2003 should be better, albeit with the overhang of uncertainty," wrote Conaghan in the article, which can be found online at http://www.naa.org/Presstime . The uncertainty of factors such as the possibility of war with Iraq complicate the task of forecasting consumers' spending patterns and businesses' willingness to invest and expand in 2003. The conservative estimate of a 3.2 percent gain envisions a somewhat weaker consumer marketplace, with linage roughly flat. This scenario forecasts the steam gradually running out of the housing and auto markets and a flat recruitment market, translating into marginal gains in classified advertising. Retail gains would be primarily in preprints, and there would be a slight gain in national advertising. Alternatively, the high-end estimate of 6.1 percent is driven by a more rapidly improving job market, even though real estate and local automotive advertising may weaken. In this scenario, recruitment advertising returns to positive territory as the economy gets past employment levels prior to the 2001 recession, helping classified bounce back. Retail advertising is less volatile and would post a modest gain. National advertising in a strong economy could be up sharply. "The newspaper industry faced some tough economic challenges over the past couple of years as the overall economy dipped," said NAA President and CEO John F. Sturm. "However, as a whole, newspapers made the proper adjustments given the business climate, and now stand in a solid position as the industry starts to see signs of an economic recovery."




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