News media sector reaches $2.28 billion in annual advertising revenue

News media sector reaches $2.28 billion in annual advertising revenue

Australia’s news media sector has reported $2.28 billion in advertising revenue for calendar year 2016, according to the latest News Media Index with data collated by SMI. It remains the third largest media sector based on advertising revenue, behind digital and television.

Digital revenue grew by 9.9%, print declined by 11.3% and newspaper-inserted magazines (NIMs) declined by 9.2%. Print revenue continues to account for around 80% of total sector ad revenue. With significant global and domestic news stories in recent months, national news brands were the best performers in Q4, with revenues essentially stable at -1.4%.

News Media Index CY2015 vs. CY2016 by media type

CY2015

CY2016

% change YOY

Total Industry

$2,466m

$2,281m

-7.5%

Print

$1,911m

$1,695m

-11.3%

Digital

$430m

$473m

9.9%

NIMs

$125m

$113m

-9.2%

The index, which is independently verified by SMI, continues to illustrate that buying decisions of media agencies are out of sync with those of direct advertisers. Digital revenue from direct advertisers grew by 21%, while agency revenue contracted by -0.5%. This discrepancy also applies to print revenue.

“Total News Media Index bookings from direct advertisers grew to 51.7% of all news media advertising expenditure in CY2016, up from 49.9% in CY2015, as agencies continued to reduce their spend on quality news media brands at a rate far higher than direct advertisers,’’ SMI AU/NZ Managing Director Jane Schulze said. “As an example, direct advertisers grew their ad spend on Melbourne’s metropolitan titles by 1.2% in CY2016 while agency spend on the same titles fell 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.”

NewsMediaWorks CEO Mark Hollands said the spending trend of media agencies was concerning and unwarranted.

“News publishers have maintained incredibly strong audience engagement, delivering quality environments that advertisers desire. Marketers who deal directly with publishers understand this and appreciate the value. 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. Hollands predicted that readers and advertisers would continue to rely on news media brands for trusted journalism and analysis.

“The unfolding political events in the United States and Europe will ensure that publishers continue to deliver engaged, articulate and valuable audiences through 2017 and beyond. No media sector is better at delivering news and explaining the context of events from around the world,” he said.
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