Here’s what I did: I used the CPI Inflation Calculator to convert the annual print ad revenue figures from 2005 through 2011 into 2012 dollars. After adjusting for inflation, ad spending fell by 62 percent in six years: from $55 billion in 2005 ($47 billion before adjusting) to $21 billion last year.
Mutter’s headline, saying sales slid to the 1984 level, did not adjust for inflation. While the total dollars in ad sales ($24 billion, including digital sales) reached the 1984 level, that 1984 figure was $51 billion in 2012 dollars. If you adjust for inflation, newspaper ad sales last year fell to their level of 1954, the year I was born.
I’m not saying that inflation adjustment that far back is even relevant: I wonder how many items the Consumer Price Index had in common in 1954 and 2011. But I think it’s fair to say that newspapers have lost a lifetime’s growth in just six years. You don’t rebound from that. You build something new.
I’ve had a wonderful career, most of it in the years when newspaper advertising revenues were rising. But the future of print is pretty clear in these numbers. I’m glad I work at a company that’s pursuing the crossover point where the rise in digital ad sales will exceed the decline in print dollars. Growing digital sales aggressively and developing new revenue streams are the only paths to a prosperous future.
Correction: I originally posted these numbers in millions, not billions. Duh. It’s not that bleak.