That didn’t surprise those at the helm of Canada’s advertising industry, who say limited advertising budgets are now being stretched across more platforms than ever before, including online, mobile, social and video.
All of which has made it easier for advertisers to precisely track the success and reach of their campaigns, and more difficult for large dailies to sell advertisers on the value of their print editions.
“Advertisers follow the crowds,” says Richard Ivey, senior-vice president of customer service at Media Experts, a media communications firm whose clients include Bell, WestJet and BMW.
“At the end of the day, most of our clients want to reach as many people as possible, and there’s a lot of those people now in other places, not necessarily newspapers.”
To be sure, fewer ad dollars flowing to big newspapers is in part a reflection of a general softening in the Canadian media advertising market amid a still-fragile economic recovery.
Though Cathy Collier, CEO of communications agency OMD Canada, says her clients have not reduced their overall media spend, for several months they have been taking more time to approve plans, and “not being as easy on the sign off.”
“It seemed to correlate really well with all of the press about Europe. Clients are smart. A lot of them are global clients and it will affect their budgets so they’re watching closely to make sure that they don’t get caught out like they did when we actually did have a recession,” said Collier, whose firm represents big names like McDonalds, Pepsi and Apple.
As Globe and Mail publisher Philip Crawley noted in explaining his rationale for offering unpaid leaves to staff this summer and fast-track plans to institute a paywall, media outlets from Rogers to CBC have been feeling the pinch.
“This is far wider than the Globe and Mail,” Crawley told The Toronto Star.
But the apparent belt-tightening isn’t affecting all segments of the newspaper industry equally.
Sunni Boot, CEO of ZenithOptimedia, which places a large number of print newspaper ads for its clients, says community newspapers that offer premium local content “are doing extremely well, and are being supported very well by advertising dollars on the print products.”
The same, however, cannot be said of traditional dailies, which have experienced a steady erosion in advertising investment that appears to be about more than a temporary pullback on the part of advertisers.
After a slight rebound in 2010, ZenithOptimedia figures show that overall advertising investment in dailies fell by 6.3 per cent in 2011 -- a measure that the agency predicts will dip by another 2.7 per cent in 2012 and 2.9 per cent in 2013.
This drop prompted Postmedia Network on Monday to announce yet another round of editorial cuts, doing away with the Sunday editions of several of its major dailies and trimming newsroom jobs.
Meanwhile, the Toronto Star saw a 6.4 per cent drop in advertising revenue last year, though that was partially offset by a 1.7 per cent bump in circulation revenue and higher prices. The slide continued into the first quarter of 2012, when print advertising revenue dropped by another 4.4 per cent.
According to Bob Hepburn, director of communications for the Toronto Star and Star Media Group, the country’s largest daily also has Canada’s biggest research department of any print organization, which allows the company to quantify to media buyers precisely how effective their campaigns can be.
“We think that we give good value to advertisers to print and online,” Hepburn told The Huffington Post.
Media buyers agree that certain types of advertisers still see a lot of value in print. But by and large, they say it has become more difficult to recommend that clients invest in big print spends when there are so many other more targeted -- and less expensive options -- on offer.
“A lot of money is going to digital,” said Michele Pauchuk, president of the leading media agency MEC. “The hard thing to swallow is that digital is just such a cost-effective medium and so measurable, unlike newspaper.”
Whereas print requires advertisers to spend a lump sum on the chance of reaching a target audience -- an amount that can easily exceed $30,000 for a full-page ad in a major daily -- online advertising is sold based on the actual numbers of impressions, she explains.
“You can be far more specific about who you’re going after, and because you’re spending less per day, there’s far more continuity that you can offer for the same amount of money [as a print ad],” she said.
Add in advertising opportunities on social, search, mobile and video, and Ivey says that when it comes to the print editions of newspapers, “the value of the product is in my opinion somewhat overpriced depending on the product you’re looking at.”
None of which is great news for papers, whose bottom lines are a testament to the fact that online advertising simply doesn’t net the volume of dollars that print ads do.
But while the outlook for the printed product may be grim, observers say that demand for news and premium curated content remains strong, suggesting that newspapers are in fact well-positioned to harness this relatively untapped -- albeit smaller -- market.
As ZenithOptimedia's Boot points out, “Readership and good content is migrating online, eyeballs are following.” He predicts that “it’s just a matter of time before [advertising investment] catches up.”
“You’re still going to have your big titles -- your Globe and Mail, certainly the Calgary Herald, the Ottawa Citizen,” she said.
“Companies like mine recommend investment, and we are recommending greater online investment with these titles with this content.”
Canada's 7 Media Giants
Postmedia - $1.1 Billion
Postmedia was born in 2010, when the bankrupt Canwest media chain was broken up. A consortium led by then-National Post CEO Paul Godfrey bought Canwest's newspaper assets, including the National Post, Ottawa Citizen and Calgary Herald, as well as both English-language dailies in Vancouver.<br> <br> Pictured: Postmedia CEO Paul Godfrey<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Torstar - $1.48 Billion
Torstar's flagship property is the Toronto Star, Canada's largest newspaper. It also owns the Metroland chain of weeklies and the internationally popular Harlequin, publisher of pulp romances.<br> <br> Pictured: The Toronto Star building in downtown Toronto.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Shaw - $4.74 Billion
Western Canadian cable TV giant Shaw entered the media big leagues with the 2010 purchase of Canwest's broadcasting assets, including the Global TV network. The company was founded by Jim Shaw and is still controlled by his family.<br> <br> Pictured: CEO Brad Shaw<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em><br> <br> <em>CORRECTION: An earlier version of this slide stated that Shaw had purchased Canwest's newspaper assets. It only purchased the broadcasting assets. The company had backed out of an earlier attempt to buy three CTV stations.</em>
Quebecor - $9.8 Billion
Founded by Pierre Peladeau and run by his son, Pierre-Karl Peladeau, Quebecor owns the Sun Media and Osprey newspaper chains, as well as cable provider Videotron, Quebec TV network TVA, and a number of publishing houses.<br> <br> Pictured: Pierre-Karl Peladeau<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Rogers - $12.1 Billion
Founded by Ted Rogers, Rogers Communications is a major player in cable TV and wireless services. The company controls Rogers Media, which operates 70 publications, 54 radio stations and a number of TV properties including CityTV and the Shopping Channel.<br> <br> Pictured: CEO Nadir Mohamed<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Woodbridge (Thomson Reuters) - $13.8B
Woodbridge is the holding company owned by the billionaire Thomson family. It controls 55 per cent of Thomson Reuters, one of the world's largest news services organizations. Woodbridge's revenue is not reported, but Thomson Reuters reported revenue of $13.8 billion in 2011.<br> <br> Pictured: The late Kenneth Thomson, company chairman, in Toronto in 2003.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Bell Canada (BCE) - $18.1 Billion
BCE is one of Canada's largest corporations, and owns telephone, Internet and TV infrastructure. Its subsidary Bell Media purchased the CHUM group of radio stations in 2006, and Astral Media in 2012. The company also controls CTV, making it a dominant media player in Canada.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>