Age managing director Don Churchill has made no secret of the fact that his business is losing classified advertising revenue, he puts a figure of $20m on the haemorrhage. Now, in the latest blow to the Victorian Fairfax masthead’s bottom line, the State Government has awarded the entirety of its print ‘public notice’ advertising to the Herald Sun.

Quantifying the financial impact of the new deal is difficult, but insiders estimate that it will run into more than $1million. The total state government contract is said to be worth $14m a year to The Age and constitutes its largest advertising contract. The Age retains the majority share of state government employment advertisements.

Tom Martin, director of the Strategic Communications Branch in the Department of the Premier and Cabinet, issued the following email edict earlier this week:

Dear all,

As you’ll be aware from my email on Monday 22 September 2008, changes relating to the way the Victorian Government undertakes functional advertising occur on 1 October 2008. These changes are mandatory for all Government departments.

Following a thorough investigation of options, it has been deemed that the Herald Sun provides better value for money, especially given the special rate it has offered in support of this policy initiative. From October 1 2008, The Age will not be used for the Victorian Government’s Functional Advertising.

Instructions about how to place functional advertising and how to use the design templates are available online.

If you require placement of public notices in regional, local, interstate and national publications you must follow Section B of the guidelines.

A series of advertisements will run in the early general news and classified sections of the Herald Sun informing readers of the new Community Noticeboard.

Any ‘large display’ advertisements will be deemed to be campaign advertising and approval is required via the Government Communications Review Committee.

The move was described by one industry insider as “a sign of the disconnection of Churchill from vital Melbourne power networks. He’s a ghost”. It’s a victory for Herald Sun MD Peter Blunden, and one in which his head of sales and marketing, Andrew Hockley, may have played a leading part.

Hockley was hired by Blunden from his previous post, director of the Strategic Communications Branch in the Department of the Premier and Cabinet. The circle closes.