Behind the Victorian government’s cutting move to online advertising

Of the media budget in 2019-20, 14.7 per cent went to the press category, dropping to 11.7 per cent in 2020-21 (and the previously stated 9.6 percent in 2021-22). The federal government spent 6 per cent of its $239.6 million media budget on press in 2021-22.

An advertising executive, who spoke anonymously due to client conflict, questioned the decision-making process.

“It looks and smells like a Dan Andrews’ call”, the executive said, describing it as a “clean uppercut” to the papers.

“This is about where people get their information,” Andrews said this week. “We will advertise on the website, and we make [a] judgement on where the audience is.”

The decision to pull government advertising spending away from print applies only to Victoria’s metro titles – The Age and Herald Sun – as well as national titles The Australian Financial Review and The Australian.

It will not apply to regional and rural media or to multicultural media. The government will continue to run advertisements that are required by legislation.

The Victorian government’s regional communication policy requires 15 per cent of annual campaign media expenditure to be spent with regional and rural media. Across 2021-22, that figure sat above the requirement at 20.7 percent.

Loading

While News Corp executive chairman Michael Miller called the government decision “an act of spite against those who dare hold it to account” on Wednesday, Andrews insisted the change was based purely on effectiveness.

A total of 20.6 million Australians aged over 14 consume news each month across print or digital, representing 96 per cent of the population, according to data from Roy Morgan.

Seventy per cent of Australians aged over 65 read printed newspapers each week, according to Roy Morgan data – more than the 65 per cent who access social media in the same demographic. In the past week, 951,000 Australians read a newspaper but did not watch TV.

Print news continues to reach 58 per cent of Australian adults each month, with metro Melbourne readership increasing 1 per cent in the first quarter of this year. Nationally, readership declined by 1 per cent across the year ending March 31, 2023.

“Even in the realm of print, news readership holds its ground. An impressive 12.4 million Australians embrace printed news each month, with close to 1 million individuals opting for print newspapers over TV in a single week,” said Vanessa Lyons, executive general manager of industry body ThinkNewsBrands.

The Sydney Morning Herald and The Age are the most read news brands across print and digital, with 8.1 million and 5.6 million monthly readers respectively, with the Herald Sun at 4.3 million. In Victoria, 2.6 million Australians pick up a copy of The Age or Herald Sun on a monthly basis.

The Victorian government has increasingly shifted its focus to digital channels, spending 45 per cent of its advertising budget online or on social platforms in 2021-22 – compared with 35.2 per cent the year prior.

The state government’s master agency media services contract, appointed by the treasury, is held by media communications agency OMD, which also services the NSW government and major Australian brands including Coles and Telstra.

OMD declined to comment. Meanwhile, a spokesman for the NSW department of customer service said the NSW government wasn’t looking to follow in the footsteps of Victoria.

“The NSW government has no plans to cease advertising in metropolitan print newspapers,” the spokesman said.

A note to Nine and News Corp from the company this week read: “OMD have been advised that all Victorian public sector print advertising in major metropolitan newspapers will cease from 1 July other than those required by statute. There will still be advertising placed in digital publications.”

Nine’s chief sales officer, Michael Stephenson, said while he was “confused” by the decision, the company maintained a good relationship with the state government and would be no worse off.

He agreed with Miller’s comments that the decision “shows disdain for the needs of the people it is meant to serve”.

Stephenson said many Victorians accessed all or most of their news from The Age’s print product and by cutting spend “you forego access to large parts of the Victorian public”.

Last year, the Andrews government announced a three-year deal with Australian Associated Press, worth $2.7 million, to strengthen regional newspapers and radio news bulletins.