Agency advertising choices have come under fire following new statistics which show newsmedia companies' direct digital advertising rising while agency revenue falls.

News Media Index figures using data collated by SMI show digital revenue of Australia's newsmedia companies grew 9.9 per cent, while print (-11.3 per cent) and newspaper-inserted magazines (-9.2 per cent) declined. Print revenue continues to account for around 80 per cent of total sector ad revenue.

Newsmedia companies took $2.28 billion in advertising revenue for calendar year 2016, making it the third largest media sector based on advertising revenue. National news brands were the best performers in the fourth quarter, with revenues falling a meagre 1.4 per cent.

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 per cent, while agency revenue contracted by -0.5 per cent. This discrepancy also applies to print revenue.

"Total News Media Index bookings from direct advertisers grew to 51.7 per cent of all news media advertising expenditure in CY2016, up from 49.9 per cent 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 per cent in CY2016 while agency spend on the same titles fell by 15.5 per cent. 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 chief executive 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 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 said.