Media agencies have been criticised for being "out of sync" with advertiers as more print ad bookings are now coming directly from brands than agencies.
Advertising revenue at news media organisations dropped 7.5%, according to the News Media Index data, although revenue from digital products increased by nearly 10%.
For the calender year of 2016, the news media sector reported a $2.28 billion profit in ad revenue, down from $2.46 billion in 2015.
NewsMediaWorks CEO Mark Hollands described the decline in spend as “concerning and “unwarranted”.
"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.
“News publishers have maintained incredibly strong audience engagement, delivering quality environments that advertiser’s desire. Marketers who deal directly with publishers understand this and appreciate the value.”
The number of bookings coming directly from advertisers increased about 2% points to 52% of advertising expenditure for print.
SMI MD Jane Schulze says the figures shows that agencies are reducing their spend on quality news media brands at a rate far higher than direct advertisers.
“As an example, direct advertisers grew their ad spend on Melbourne’s metropolitan titles by 1.2% in calender year 2016 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," she says.
Advertising revenue for printed products is still the main bread winner for the news media sector, accounting for 80%, but dropping from $1.9 billion to $1.7 billion, a fall of 11.3%.
Revenue from newspaper-inserted magazines also declined, from $125 million to $113 million or 9.2%. But revenue from advertising on websites and mobile increased from $430 million in 2015 to $473 million.
As fake news continues to be a hot topic across the industry, Hollands predicts readers and advertisers will continue to rely on news media brands for trusted journalism and analysis.
“The unfolding political events in the US 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 says.
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