Media agencies ‘out of sync with direct advertisers’, says NewsMediaWorks boss
The boss of industry association NewsMediaWorks, Mark Hollands, has lashed media agencies for pulling too quickly out of print, saying they are “out of sync” with direct advertisers.
The comments come as new figures from the industry body showed the major publishers, News Corp Australia, Fairfax, West Australian Newspapers and APN News & Media went backwards financially with total revenue for the financial year falling 6.6% to $2.3bn.
In quarter two the sector was down 5.4% according to the figures collated by Standard Media Index with the industry’s revenues falling $32.6m to $575.5m.
The quarter saw digital up 14.4% from $102.2m to $116.8m but this was overwhelmed by losses in print, which fell more than $45.9m from $485.8m to $439.9m a decline of 9.4%. Newspaper inserted magazines fell from $20m to $18.6m – a decline of 7.1%.
Hollands: spend still out of sync
“The buying decisions of media agencies continue to be out of synch with those of direct advertisers,” said Hollands. “The recent agency-only spend data from SMI shows investment off 13% for Q2 for newspapers when compared with Q2 2015, while the whole of industry picture shows the decline to be much smaller at 5.4%.
“This disparity is significant. Advertisers with close publisher relationships, and who understand the engagement of their audiences, see the value in news media brands and remain with them because they represent a successful marketing investment,” he said.
Hollands also trumpeted that the growth in the digital business: “Our latest revenue results again illustrate the true size of the sector and the robustness of the news media business in challenging economic times.
“Growth of 14.4% in digital revenue for Q2 demonstrates the ongoing success of the industry in its transformation to create a profitable balance of print and digital news media offerings. For the entire fiscal year, digital revenues have risen 17.5% compared with FY15.
“Importantly, direct revenues have held up well with a small decline of 1.2% in Q2 compared with the corresponding period in 2015.”
The revenue data is taken from NewsMediaWorks’ foundation members, News Corp Australia, Fairfax Media, West Australian Newspapers and APN News & Media, represents approximately 90% of the news media sector. SMI extracts the information directly from publisher financial systems.
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