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Digital publishers to prioritise non-advertising growth in 2019

Digital publishing revenues increased by 5.3%, with combined totals rising to £452.8 million over the last year, according to the latest Digital Publishers Revenue Index (DPRI), a quarterly report on UK publishing from the Association for Online Publishing (AOP) and Deloitte.

Digital publishers to prioritise non-advertising growth in 2019

According to the latest DPRI report, display formats and subscriptions continued to drive digital publishing growth, up 9.1% and 7.2% respectively on a 12-month rolling basis from October 2017 to September 2018. Online video revenues grew by 21.4% in Q3 2018 compared to the same period last year, with the format experiencing 7% growth across the full 12-month period.

In the 12 months to September 2018, B2C digital publishers saw growth of 6.9%. In contrast, B2B publisher revenues declined by 1.6% over the same period. However, B2B publishers experienced an uplift in display formats and subscriptions, which increased by 2% and 4% respectively.

Desktop only revenues were down 33% in Q3 2018 compared to Q3 2017, due to the growing number of multi-platform campaigns, from which revenues increased by 42% from £47.1m to £66.8 million. This was largely driven by a 176% increase in digital display revenue, which rose from £10.3 million to £28.5 million.

In terms of future revenue growth, 83% of AOP Board Members reported they will make non-advertising revenues a high priority for their business over the next 12-months, with the same number wanting to diversify their revenue streams by expansion, or the introduction of new products and services.

Despite positive revenue growth, the DPRI report highlighted a decrease in confidence from both company and industry perspectives, down 27% and 44% respectively in Q3 2018 compared with the previous quarter. The cross-industry Deloitte CFO survey similarly identified falling levels of confidence over the quarter.

Richard Reeves, Managing Director, AOP, commented: “The continued increase in digital publishing revenues is extremely encouraging, as display advertising and subscription revenue lead the way to drive growth for the industry. And with many publishers actively focussed on growing non-advertising revenue streams, the industry has many interesting areas of innovation.

“However, in the last quarter we have seen a slight slowdown in revenue growth. The implementation of GDPR earlier this year and anxieties around Brexit have no doubt generated feelings of uncertainty, resulting in a drop in confidence throughout the industry. This is something that will need to be carefully monitored in 2019, as the digital publishing industry looks to increase revenues further and build a sustainable future for all.”

Dan Ison, lead partner for media and entertainment at Deloitte, commented: “Display and subscriptions continue to provide an uplift to digital publishing revenues, and there is certainly a lot for the industry to feel positive about.

“Our research shows that 88% of adults in the UK own or have access to a smartphone, and there are now more ways than ever to consume content on the go. Social media, instant messaging and apps provide people with a platform to consume content easily and elegantly on their smartphone, and more than a third of smartphone owners read the news on their smartphone daily.

“Plans for new products and services will only continue to fuel this consumption and, coupled with a focus on non-advertising revenues, we hope to see online publishers’ confidence recover.”