The 2005 to 2006 report also revealed that departments which bought media through COI made record savings, cutting costs by 44.1 per cent compared with industry benchmarks.
Areas to feel the pinch included direct and relationship marketing, which saw a 24 per cent fall. COI investment in the medium fell from £35.9 million in 2004-2005 to £27.2 million this year.
Investment on events also dropped but spend on digital media continued its rise from the year before. This increased by more than £1 million to £12.1 million.
Peter Buchanan, the deputy chief executive of COI, said: "Digital is obviously becoming more important, particularly for reaching young people and for things such as the armed forces recruitment campaigns. We find more and more people are accessing that information via the web."
He said that the Phillis review of 2004 into government communications had encouraged COI to use all means of communication to get its messages across. Buchanan added that it had been a strong year creatively for COI.
"One example that stands out is smoking cessation, which has won eight creative awards in 2006 so far. Teenage road safety won a D&AD Pencil and a gold at Cannes, and the Home Office domestic violence campaign won four awards at the Campaign Direct awards," he said.
COI's Inland Revenue self-assessment campaign also won an IPA Effectiveness Award last year.