CORRECTED: Newspaper online ads up, overall ads off

(Corrects name of association in paragraph 2 to Newspaper Association of America from National Newspaper Association of America)

NEW YORK (Reuters) - Online advertising spending at U.S. newspapers rose 21 percent in the third quarter but failed to offset a print ad spending decline, according to a study released Tuesday.

While ad spending on newspaper Web sites rose to $773 million in the third quarter from the same period a year earlier, print ad spending fell 9 percent to $10.1 billion, a Newspaper Association of America study showed.

Online ad spending now accounts for 7.1 percent of total ad spending at newspapers, up from 5.4 percent a year earlier.

The third quarter's online ad growth marked the 14th consecutive quarter of double-digit percentage growth for newspapers.

Total ad spending at newspapers fell 7.4 percent to $10.9 billion in the quarter.

Newspaper companies including New York Times Co, McClatchy Co, and Gannett Co Inc are grappling with profit declines from advertising shortfalls even as they increase Internet investments to offset those loses.

Last week, Gannett's USA Today said it would cut 45 positions or 8.8 percent of its editorial staff.

But online ads remain a small percentage of overall ad spending at the papers.

"Broader economic issues are impacting our industry the same way they are impacting other media -- the continued fallout from declines in the housing market clearly affects real estate, recruitment and retail advertising," Association President and Chief Executive John Sturm said in a statement.

The hardest-hit advertising sectors were classified ads, down 17 percent to $3.4 billion; retail ads, down 4.9 percent to $5.1 billion; and national ads, down 2.5 percent to $1.7 billion, in the third quarter.

(Reporting by Kenneth Li, editing by Gerald E. McCormick)