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Aussie media agencies criticised

News, 01 February 2017
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SYDNEY: Australian news media saw advertising revenues fall 7.5% in 2016, with industry figures expressing criticism of the role played by media agencies in allocating clients' budgets.

Total revenues for the year stood at A$2,281m, according to data from trade body NewsMediaWorks, with print accounting for almost three quarters of the total (A$1,695m), but this was 11.3% down on 2015.

Adding newspaper-inserted magazines (NIMs) brings print's share to nearer 80%, but these were also down 9.2% to A$113m.

Digital spending increased 9.9% to A$473m, but the additional A$43m it brought in was not even one quarter of the A$185m lost by print.

A notable finding from the figures, which are independently verified by ad intelligence firm Standard Media Index, was that digital revenue from direct advertisers grew by 21%, while agency revenue contracted by 0.5%, a divergence that was also evident in print revenue.

Jane Schulze, AU/NZ Managing Director of SMI, reported that bookings from direct advertisers now stood at 51.7% of all news media advertising expenditure, up from 49.9% in 2015.

And she observed that while direct advertisers had grown ad spend on Melbourne's metropolitan titles by 1.2% during 2016, agency spend on the same titles had fallen by 15.5%.

"It raises a valid question as to how the same titles could obviously deliver great value for direct advertisers while the agency market looks elsewhere," she said.

NewsMediaWorks CEO Mark Hollands said the spending trend of media agencies was concerning and unwarranted, arguing that news publishers not only have strong audience engagement, but offer quality advertising environments.

"Agency choices on behalf of their clients are out of sync with the many advertisers who choose to commercially engage directly with publishers," he said.

In a world plagued by fake news, Hollands predicted that readers and advertisers would continue to rely on news media brands for trusted journalism and analysis.

Data sourced from NewsMedia Works; additional content by Warc staff

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