But not all components of the great engine of newspaper revenue are performing at peak levels. But since the fourth quarter of 1998, nominal quarterly GDP gains have exceeded newspaper increases. Depending on the category, the reasons can be linked either to cyclical constraints caused by a rocketing economy or to structural factors that date back more than a decade. Real-estate advertising grew sluggish in the first half of last year, up just 3 percent, then turned negative in the second half, deepening to a 4 percent decline in the first quarter of this year. This is one instance where a booming economy has hurt newspaper advertising.
Retail spells a different story.
The restructuring and consolidation of the retail business that began in the mid-1980s continues, and the reverberations of that shifting marketplace are reflected in the level and composition of advertising pages in the newspaper. These trends were reflected in figures for the first five months of this year for a number of large retailers. In nearly two dozen measured markets, Best Buy Electronics increased its preprint spending by 27 percent and its part-run spending by 38 percent, but cut ROP by 21 percent. In the same set of markets, Circuit City dropped its ROP spending by a quarter and boosted preprints by over 60 percent. JC Penney, in the same markets, dropped its overall spending level by 40 percent yet more than doubled its allocation of part-run business.