"What Happens When Newspapers Cut Back on Marketing Investments? An Empirical Analysis"

Elina Tang writes:

Faced with a crisis in the newspaper business, many newspapers are cutting costs. In fact, research has found that three-fourths of all newspapers have cut 10 percent or more of their newsrooms. The authors analyzed how cuts in news, distribution, and advertising departments affected total revenues and profits. The analysis was based on 1999 Inland Press Association data from 327 newspapers under 85,000 daily circulation.

Among the findings:

1. Newsroom cuts are the most costly on revenues. A one percent cut in newsroom expenditures led to a .44 percent drop in revenue.

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