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Analysis: In scare for newspapers, digital ad growth stalls | Reuters

As more newspapers cut back on print to reduce costs and focus on their websites, a troubling trend has emerged: online advertising sales are stalling.

In the first quarter, digital advertising revenue at newspapers rose just 1 percent from a year ago, the fifth consecutive quarter that growth has declined, according to the Newspaper Association of America, a trade organization.

A flood of excess advertising space, the rise of electronic advertising exchanges that sell ads at cut-rate prices, and the weak U.S. economy are all contributing to the slowdown, publishing executives and observers say.

For an industry savaged by the erosion of print advertising dollars, significantly boosting digital revenue is necessary for survival. But the double-digit online growth rates that many newspapers used to enjoy — and on which their hopes for a prosperous future rest — could be a thing of the past.

via Analysis: In scare for newspapers, digital ad growth stalls | Reuters.

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