According to the Wall Street Journal, newspaper companies are scaling back advertising expectations because things got worse in the second quarter than they thought it would. Analysts also expect that the trend will continue into the third quarter, which would perhaps lead to even more massive layoffs (in June, Gannett cut about 700).
There are a couple reasons why ad dollars slowed so severely:
The key drag on ad results for a number of these companies was a significant pullback by local retailers, which account for more than half of ad revenue at many local papers. The uneasy economy and the longer-term shift of ad dollars online continue to play a big role, analysts and executives say. Another factor is the emergence of daily-deal sites led by Groupon Inc., which have siphoned at least some ads away from papers, said Craig Huber, a senior analyst at Access 342, an independent stock-research company.
See that Groupon lovers? Because you can’t pay full price for a month of Subway foot longs, the newspaper industry is dying. Shame on you.