Major metropolitan newspapers could lose up to $40m in advertising revenue if state and federal governments follow Victoria’s lead and pull their print advertising.
In 2022 state and federal governments spent about $40m placing government ads in major capital city newspapers, and another $5m on digital advertising on news websites like heraldsun.com.au and theage.com.au, according to media agency data collected by Standard Media Index.
The Victorian government on Tuesday announced it would cease print advertising in Melbourne newspapers the Herald Sun and the Age from 1 July because the audience for print is dwindling, prompting a furious response from the Murdoch press.
Daniel Andrews said more of the government’s budget will be focused on digital advertising, which will continue to be placed on the websites of the Herald Sun and the Age.
The Victorian government spent 9.6% of its advertising budget on print in 2021/22 – down from 22% in 2014/15. But its digital spend has been growing, from 22% almost a decade ago to 45%, according to a government advertising report.
The premier said print advertising was no longer providing value for money for taxpayers when compared with television and digital channels, including news websites and social media platforms.
“We’re not making any apology for focusing our efforts much more acutely on online, digital, television – that’s where the audience is. That’s where the return on investment for taxpayers is,” Andrews said on Tuesday.
The move is backed by media buyers and academics, who say the dwindling medium of print is no longer a priority for advertisers and the trend is likely to spread nationwide.
The managing director of media agency Nunn Media, Chris Walton, said advertisers with a finite budget were always going to chase audiences.
“The Victorian government has taken the view that they’d get a better return on their objectives by moving away from print,” Walton said. “They’re not the first and they won’t be the last but they are probably the most notable.”
Robert Crawford, the professor of advertising at RMIT University, said governments had only become major advertisers in relatively recent history, overtaking multinationals. As a result, media companies were reliant on that revenue as it was significant and consistent.
“With the circulation of hard copies decreasing over time, major advertisers like governments are very important,” Crawford said. “So, their shift out of that space is going to be really felt.
“I would imagine that you’re going to see that happening interstate as well.
“It’s a significant shift and certainly with their business models built on advertising revenue it’s very problematic.”
The executive chair of News Corp Australia, Michael Miller, claimed the Andrews government was showing “disdain” for the public by denying “2.6m Victorian readers of newspapers” important government information.
“The numbers don’t add up,” Miller said on Wednesday. “It is hard to see this directive as anything other than an act of spite against those who dare hold it to account.”
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Readership numbers are no longer based on circulation because media companies stopped reporting sales figures. Walton said the readership figures claimed by newspapers can be based on as many as seven readers for every copy.
Murdoch’s Victorian tabloid the Herald Sun showed its anger about the decision with a front page claim that “many Victorians who rely on newspapers as their main source of information could be left in the dark on critical safety and health information and public notices”.
Andrews denied the ban was “retribution” for the two newspapers holding the government to account through their reporting, saying the government would continue to advertise on their websites.
“This is about where people get their information … and where there is maximum benefit,” Andrews said.
The government will continue to place advertisements in print editions of regional and multicultural newspapers, with the two sectors accounting for 20% and 10%, respectively, of its total campaign budget.
The Victorian government’s total advertising spend in 2021/22 was $150.6m, of which 9.6% was spent on print, 18.6% on television, 13.6% on radio and 11.6% on outdoor advertising.
Nine Entertainment, publisher of the Age and the Sydney Morning Herald, expects the print advertising dollars to flow to its digital news platforms.
“While we are minimally exposed when it comes to the Victorian government’s print ad spend, we have every expectation that what advertising was devoted to print will flow through to our publishing digital platforms,” Nine’s chief sales officer, Michael Stephenson, said.
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