The Great Depression that began late in 1929 and extended through the early 1930s had a major effect on U.S. newspaper advertising expenditure. U.S national advertisers spent less on newspaper advertising in 1938 than in 1919. In 1938, spending of national advertisers in newspapers was only 57% of the corresponding advertising spending in 1929.
Greater concentration of national newspaper advertising expenditure occurred in conjunction with the collapse in advertising expenditure. In 1924, the top-100 national newspaper advertisers accounted for 22% of total national newspaper advertising spending. In 1938, the top-100 national newspaper advertisers accounted for 55% of total national newspaper advertising. This increase in the share of the top advertisers is not merely the product of mergers among top advertisers. In 1938, the top-50 national newspapers advertisers accounted for 44% of national newspaper advertising, far greater than the 22% for the top-100 in 1924.
The current contraction in advertising spending in newspapers and magazines is more rapid than that in the Great Depression of the early 1930s. The concentration in advertising spending that occurred in the Great Depression, if repeated in the current contraction, may help traditional newspapers. Established personal relations and customized services are likely to be more important for securing the business of the largest advertising accounts. Hence increased concentration in advertising spending probably favors traditional media over new media.
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Data (for U.S.): national newspaper advertising expenditure by top-100 firms in 1924 and 1938 (Excel version); aggregate national and local newspaper advertising spending, 1915-1938 (Excel version); magazine advertising expenditure, apparently available only for 1913 to 1929 (Excel version).