“Macy’s has cut in half the amount of money it spends on newspaper advertising since 2005, depriving the struggling industry of some $616 million in sorely needed revenues,” Newsosaur Alan Mutter reported on his blog today. That steep decline from the nation’s second largest newspaper advertiser certainly helps to explain the death spiral of the newspaper industry, though Macy’s still spent an incredible $583.3 million on newspaper advertisements last year, according to these numbers from TNS. Which leaves me wondering: What the heck is Macy’s — a company with a market capitalization (or total stock value) of about $4.6 billion — doing spending more than 10 percent of the value of the entire company on a year’s worth of newspaper advertisements? That can’t be the best use of the company’s ever-shrinking resources. Gotta sell a lot of duvets to make that $583 million back.

I hate to say it, but if it’s smart, Macy’s — or any other giant consumer debt-fueling machine that makes America so, er, great — shouldn’t ever spend hundreds of millions of dollars a year on newspaper advertisements again. Ever. There are now far better and cheaper ways to reach and sway potential customers. Newspaper advertising revenue is never coming back. Much as I love newspapers, there’s only one way for the newspaper advertising spend of intelligent businesses to go: down.

Which brings us to General Motors, the smartest, best-run company in America. According to the same stats, in 2008, GM more than doubled its spending on U.S. newspaper advertisements, from $145.9 million in 2007 to $320.9 million in 2008. What to do if you’re a bloated, outmoded manufacturer of lousy, unpopular, expensive cars, teetering on the edge of bankruptcy, begging the government for massive bailouts and sucking the exhaust of savvy foreign competitors? Double your advertising in a dying medium, of course!

General Motors was the country’s third largest newspaper advertiser in 2008, second largest magazine advertiser, fifth largest national radio advertiser and third largest network TV advertiser. Add up GM’s 2008 advertising spending in just those four outlets and you get $1.53 billion — more than three times GM’s market cap. And that doesn’t even take into account the bankrupt car maker’s many other forms of ad spending. This is madness.

This profligacy isn’t just ill-advised. It’s offensive. GM begged and bagged more than $20 billion in federal aid in the last several months before declaring bankruptcy in June. That’s our money buying those ads. I’m happy to help newspapers just about anyway we can — but not through taxpayer-subsidized ad buys funneled through a dying automaker. Then-CEO Rick Wagoner told a Congressional committee last November that if taxpayers didn’t pony up billions for GM, “the societal costs would be catastrophic.” Maybe there’s a dimension to that quote we didn’t immediately pick up on. Without the insane, over-the-top newspaper advertising spending from companies like GM and Macy’s, big dailies that got used to those gushing revenues will likely continue going out of business. And though that really would be catastrophic, it would also be crazy for companies to continue pouring hundreds of millions of dollars into ink-on-paper ads.

(Photo: imageafter)