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Is online newspaper advertising cannibalizing print advertising?


During the past decade, the newspaper industry experienced significant erosion of revenues, predominantly in print advertising. The concomitant increase in the less rewarding online advertising has been unable to make up for this loss. As a result, for every $1 increase in online advertising between 2005 and 2011, newspapers lost $22 in print advertising. While it is conceivable that the overall change in the advertising landscape (such as the growth of targeted search advertising), contributed to the decline in print advertising, it is not clear whether the growth in online newspaper advertising aggravated or alleviated this global trend. We investigate this concern by studying how advertisers reallocate their media budgets over time between the online and print media within a newspaper. We perform our empirical analysis using unique panel data on account-level advertising expenditures in a Top 50 US newspaper from 2005 through 2011. After accounting for cross-sectional heterogeneity among advertisers and some factors that possibly drove both print and online newspaper advertising, we find a negative relationship between the ad spending in these two media options. Therefore, advertisers exhibit a higher propensity to decrease print spending when they increase their online spending compared to the scenario when online spending either remains unchanged or even decreases. Since we do not rely on exclusion restrictions, we cannot rule out residual factors that drove both print and online advertising and thus contaminated this relationship. However, such potentially confounding factors (e.g., change in total media budget) are likely to have induced a positive correlation between print and online advertising. Therefore, the negative relationship that we recover is suggestive of advertisers perceiving print and online newspaper advertising as substitutes. This, in turn, implies that the growth in online newspaper advertising exacerbated the overall decline in print advertising. Overall, we attribute 7-17 % of the decline in print newspaper advertising revenues between 2005 and 2011 to the growth of online newspaper advertising. We conclude that cannibalization should be a credible consideration in the marketing decisions of the newspaper. However, since a large portion of print advertising revenue decline also occured for advertisers who never purchased online advertising from the newspaper, cannibalization within the newspaper is not solely responsible for the downward trajectory of print advertising.

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  1. 1.

    Although print circulation volumes have declined across the board, circulation revenues have remained relatively flat because of higher subscription prices (

  2. 2.

    These figures were obtained from Newspaper Association of America (

  3. 3.

    Since we do not have data prior to the existence of the online newspaper, we cannot infer how the existence of online newspaper advertising affected the newspaper’s overall ad revenues.

  4. 4.

    Goldfarb and Tucker (2011b) use a variation of this approach and study the effect of advertising bans in one medium (i.e., infinite price) on the demand and hence, ad prices in another medium.

  5. 5.

    Technically, (d) is general enough to include (c). We present them as separate for clarity of exposition.

  6. 6.

    Although newspapers have increased their reliance on ad networks to sell online ads, 88 % of their digital ad revenues still came from their own sales staff during the period of our analysis (Rosenstiel et al. 2012).

  7. 7.

    We define an advertiser as exclusive if they only advertised in either the print or the online version of the newspaper during the entire period of our analysis. Therefore, the classification is purely cross-sectional and hence, constant over time. In subsequent analyses, we consider within-advertiser changes, which nets out any differences between these two types of advertisers.

  8. 8.

    We define an advertiser as local if (a) the advertiser does not have a significant presence outside the local market, or (b) the advertiser uses the medium to communicate information specific to the local market. Under the second condition, we classify an advertiser with presence beyond the local market (e.g., AMC theaters) as local if the ads are likely to contain information specific to the local market (e.g., showtimes for movies).

  9. 9.

    We obtained the data from the Newspaper Association of America (

  10. 10.

    As mentioned earlier, the U.S. newspaper industry lost $22 for every dollar it gained in online advertising during this period. Therefore, the loss experienced by the focal newspaper is consistent with those experienced by a broad basket of newspapers in the U.S.

  11. 11.

    We also tried a specification where we interacted the advertiser characteristics with year fixed effects instead of the time trend. The substantive insights were similar.

  12. 12.

    The R-squares that we report are for the first difference estimators and need to be interpreted as the extent to which the variation in the within-advertiser changes in print ad spending over time is explained by the independent variables. In fact, if we estimate the advertiser fixed effects without using the first difference estimator, R-squares are consistently higher than 0.9 for all the models that we report in the paper. Therefore, the low R-squares in the first difference estimators reported in the paper cannot be attributed to the inability of the advertiser fixed effects to capture the cross-sectional variation across advertisers.

  13. 13.

    We also estimated a model with indicators for positive and negative changes in online ad spending in addition to their interactions with the magnitude of the change (as in Eq. 3). The substantive results remained unchanged. The results can be obtained from the authors upon request.

  14. 14.

    In fact, when we used less flexible controls for the temporal dynamics in the form of a linear time trend, we recovered a smaller negative coefficient for the tradeoff between ad expenditures. Specifically, the coefficient when online ad expenditure increased was −0.47 when we used a linear time trend, as opposed to −0.48 with the time fixed effects. For large local advertisers, the coefficients were −0.5 with linear time trend versus −0.52 with year fixed effects.

  15. 15.

    The presence of a substituting relationship does not imply cannibalization of print advertising by online newspaper advertising. If the negative tradeoff was triggered by an exogenous decline in the perceived effectiveness of print advertising per dollar, under a substituting relationship, advertisers could have responded by lowering their ROP spending and increasing online spending. Such a scenario is not consistent with cannibalization of print advertising by the more attractive online newspaper advertising. On the other hand, if the decline in ROP spending was triggered by the increasing attractiveness of online newspaper advertising, cannibalization is likely to be a concern. Therefore, while the negative relationship might be consistent with advertisers perceiving the two media options as substitutes, our analysis does not permit us to take a stance on the direction of the effect.

  16. 16.

    For advertisers that exclusively used the print medium, we can categorically say that the growing attractiveness of online newspaper advertising did not have an effect on their ROP ad expenditure. On the other hand, we acknowledge that the growing attractiveness of online newspaper advertising might have precluded them from ever using print advertising during the seven years of our data. However, since our analyses were based on advertisers that used ROP advertising at least once, evaluating the credibility of this concern is beyond the scope of this study.

  17. 17.

    Note that these analyses are based on the online spending at the focal newspaper and are comparable to the analyses presented in Section 3.1.

  18. 18.


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The authors thank Dan Ackerberg, Anocha Aribarg, Pradeep Chintagunta, Fred Feinberg, Rajdeep Grewal, Wes Hartmann, Pranav Jindal, Aradhna Krishna, Gary Lilien, Puneet Manchanda, Murali Mantrala, Kanishka Misra, Yesim Orhun, Joseph Pancras, seminar participants at the Iowa State University, Syracuse University, University of Michigan, University of Virginia, University of Wisconsin, and the participants at the 2012 Marketing Science Conference, 2014 UTD FORMS conference and 2014 ISBM Academic Conference for their comments and suggestions. The first author would like to thank Smeal College of Business for summer funding that enabled this project. The second author would like to thank the 3M Corporation for financial support. The authors are solely responsible for all errors and omissions. The authors also thank the Reynolds Journalism Institute at the University of Missouri for enabling them to obtain the data. The standard disclaimer applies.

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Correspondence to Srinivasaraghavan Sriram.

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Sridhar, S., Sriram, S. Is online newspaper advertising cannibalizing print advertising?. Quant Mark Econ 13, 283–318 (2015).

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  • Advertising
  • Newspapers
  • Cannibalization
  • Offline vs. online advertising
  • Econometric models

JEL Classification

  • M31
  • M37
  • C31