Of course.
Not only was it the main source of revenue, but it was also a source of local relevance. For instance, one of the reasons I check my local weekly paper is to see who charges the best price to change my winter tires and which local garage can offer me that service. It may sound naive or innocent, but that's the kind of information you can find in your local paper. What happened? Today, the news component is there, of course, but news without compensation for journalists doesn't exist. So advertising is really what it comes down to.