https://www.axios.com/2022/06/21/digital-newspaper-ad-revenue-print

Data: PwC; Chart: Axios Visuals

The U.S. is expected to make history in 2026 when it becomes the first major media market in the world to see digital newspaper ad revenue eclipse print newspaper ad revenue, according to a new report from PwC.

Why it matters: Newspapers have been slower to migrate advertising revenues to digital than the broader publishing landscape because of their local footprint.

  • “It’s not a difference in a willingness to digitally-transform, but a marketplace difference,” said CJ Bangah, a principal at PwC who focuses on media and co-author of the new report.

By the numbers: U.S. newspaper publishers will lose $2.4 billion in ad investment between 2021 and 2026, largely due to print advertising losses. While digital will grow marginally, it won’t be enough to stop the industry from losing ad revenues overall.

  • Print advertising will fall from $7 billion last year to $4.9 billion by 2026. That 7.7% compound annual growth rate (CAGR) is well ahead of the global average decline, which is -5.1% CAGR.
  • Digital ad revenue will expand 1% CAGR, adding just $251 million from 2022 to 2026, per the report.
  • By 2026, digital newspaper ad revenue will be roughly $5 billion, slightly surpassing print. (The company categorizes a digital newspaper as any type of news outlet, whether it started as a print outlet or is a digital-first outlet. Print newspapers include dailies and weeklies.)

The big picture: Newspapers that cater to local markets struggled to offer competitive digital advertising rates for local businesses online, Bangah said in an interview at the Cannes Lions Festival in France, where she unveiled the new data.

  • Local businesses that previously relied on newspapers to geographically target users at the local level found more cost-efficient options on Big Tech platforms.

What’s next: News companies are relying on subscription business models to subsidize slowing ad revenue losses. PwC predicts that newspaper circulation revenues, in both digital and print, are expected to surpass advertising in 2022.

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