Digital publishers want to grow non-advertising income as display revenue tanks

Nearly nine in 10 digital publishers consider non-advertising income 'high-priority' focus.

Digital revenue: decline for mobile devices and desktop
Digital revenue: decline for mobile devices and desktop

A substantial fall in display advertising drove an overall decline in publishers’ digital revenue in the summer, new figures have revealed.

Digital publishing revenue fell by 3.7% year on year to £113.1m in the second quarter of 2019, according to the Association for Online Publishing and Deloitte’s quarterly Digital Publishers Revenue Index

A 15% fall in display advertising was almost entirely responsible for the decline in digital revenue growth. Healthy increases in online video (20%) and subscriptions (14%) failed to offset the drop in display.

For the next 12 months, AOP board members are prioritising diversifying revenue streams, the report added. The vast majority (88%) said non-advertising growth is a "high-priority" focus, while half of publishers reported the introduction of new products and services as a high priority. 

The way in which digital ads are bought on the open market have come under scrutiny this year amid a Information Commissioner’s Office investigation into real-time bidding that began in June. Yesterday (Tuesday), the ICO confirmed that it had found adtech companies were holding on to personal data, while sensitive information about users was being processed without explicit consent.

However, optimism among AOP board members regarding their own company’s financial prospects rose during the same period to 75% – a 31 percentage point increase compared with the second quarter of 2018.

The fall in digital revenue hit desktop hardest (down 58%), while revenue from smartphones and tablets fell by 12%. However, multiplatform revenue (campaigns across device types) increased by 20% – something that the report said was reflective of changing consumer behaviours.

Richard Reeves, the AOP’s managing director, said "Publishers across the board are looking to diversify their revenue sources and move away from solely relying on advertising revenue.

"While industry challenges remain constant, especially given the increased scrutiny from the ICO, there is a continued need for publishers to take responsibility and find solutions to address these issues."

The report surveyed 21 UK digital publishers, 15 of which are consumer titles and six are business-to-business.