In the U.S., nearly 70% of our Gross Domestic Product (GDP) is based on consumption. In fact, Americans spend a little over $11.2 trillion on goods and services.
The breakdown is about 65% on ”services,” such as housing, health care, travel, education, entertainment and personal care. The remaining 35% is spent on ”goods.” Economists tend to split the goods category into two types: 22% of spending on goods is non-durables (every day items such as clothing, groceries, fuel and household items); the other 13% of spending on goods is toward larger and less frequent purchases like cars, trucks, tractors, furniture and appliances.
Of course -depending on age, life-stage, income and a host of other factors- each of us may have somewhat different ratios of services to goods. Nevertheless, the ”average American consumer” spends about 65% on services and 35% on non-durable and durable goods each year.
The question you might want to be asking is -how well do the ads in your pages reflect what Americans are buying?
Over the past month, the Print Observer has profiled four local dailies (one in Vermont, Indiana, Washington State and Texas.) For each paper, we tabulated and analyzed the ad space in a recent Sunday edition. The analytics included: the number of ads overall and in each ad category; the total ad inches, total inches for each ad category and the average size of the ads in each category relative to the average size of all the ads in the section.
Looking back at the data, it’s interesting to note how well the advertising categories represented in the papers compare to consumer spending habits. Across the four dailies we reviewed, the average number of ads in the services category was 48%, the average in the non-durables category was 30% and the average in the durables category was 28%.
- The services category (housing, health care, restaurants etc.) had a range of 68% to a low of 28%.
- In non-durables (groceries, clothes, household items etc.) the high was 49% and the low was 4%.
- In the durables category (autos, furniture, appliances etc.) the high was 28% and two papers had no advertising at all for durables.
- Two papers also had a large number of house ads and/or political.
We only looked at four Sunday papers so this small sample is not necessarily indicative of the trends in newspapers across the country. However, the four papers were all mid-size dailies in small cities that are not unlike most other small cities in America so the averages across the basic categories are likely to be proximate.
Ultimately, considering where your readers spend the bulk of their dollars (65% services/35% goods) is as good a guide as any for targeting the kinds of advertisers that are likely to do well in your pages. If you’re at 60% or better for services and 30%-40% for goods, you at least know your publication is aligned well with general consumer spending habits and you’re at about the level of advertising, in each category, readers can tolerate.
Post by Jim Jinks
The Print Observer - Newspaper & Magazine Advertising Insights 