Digital publishers have made a “dynamic shift” to prioritise advertising revenue growth, the latest report from the UK’s Association of Online Publishers (AOP) and Deloitte has found.
The AOP’s quarterly Digital Publishers Revenue Index (DPRI) analyses survey data from UK digital publishers about their revenue priorities each quarter. The December 2020 quarter results are interesting for Australian publishers to note because they represent a quick step-change in priorities for publishers – one that may mirror the experience and trajectory of Australian publishers.
Of those the AOP surveyed in the December 2020 quarter, 78 per cent viewed advertising revenue growth as a high strategic priority across 2021 – compared to pervious quarter, where no respondents cited it
AOP said that this marks a clear refocus in digital strategies as publishers continue to adapt to the impact of COVID-19. With 89 per cent of publishers also prioritising non-advertising revenue growth – up from 60 per cent this time last year – AOP said that “it is clear that all possible revenue streams are once again a key focus for publishers”.
The report found that cost reduction is also a high priority for 56 per cent of publishers surveyed in the latest DPRI, in comparison to 33 per cent a year earlier, as they concentrate on driving efficiency following a turbulent 2020.
According to the report, 53 per cent of digital publishers witnessed positive revenue growth in the December 2020, more than double that of the previous quarter (22 per cent). AOP said that this growth was driven in part by a significant rise in subscription revenue, which increased by 51.3 per cent from December 2019 to December 2020.
Despite this marked rise, the AOP found that growth was offset by the year-on-year contractions in display (-3.6 per cent) and online video (-38.5 per cent) advertising, sponsorship (-25 per cent), and recruitment (-63.6 per cent). As a result, total digital revenue in the December 2020 quarter was down by 1.1 per cent compared to the previous year. This is in contrast to the experience of Australian publishers, with IAB Australia announcing a 20.3 per cent increase in digital advertising revenue for the same period.
In the B2B sector, overall revenue experienced an increase of 4.1 per cent in the December 2020 quarter compared to the previous year 2019. AOP said that this was fuelled by an uptick in display advertising (15.2 per cent), and subscription (5 per cent) revenues.
B2C publisher revenue, meanwhile, witnessed a decrease of 1.6 per cent compared to the same quarter last year, but continues to be buoyed by a 68.3 per cent rise in subscription revenue.
Following recovery from Q2 2020, AOP said that confidence in the UK publishing industry has risen considerably, mirroring broader economic optimism following the announcement of COVID-19 vaccine efficacy.
AOP Managing Director Richard Reeves said: “As the publishing industry starts to recover from the impact of the global pandemic, it is promising to see optimism continue to rise. While digital advertising remains the largest income stream for publishers, the positive growth of subscription revenue demonstrates how the industry has adapted to be stronger and more resilient in the face of the challenges posed by last year.
“However, it is interesting to note a returned focus on advertising revenue growth as a high strategic priority in the year ahead. Since the outbreak of COVID-19, news sites and premium publishers have attracted greater readerships with their trusted content; fresh opportunities to leverage this will no doubt arise as publishers make smarter decisions to support their bottom lines.”
