Display advertising continues to be a significant revenue driver for UK digital publishers as a study reveals publishers’ total revenue grew by 5.6% in the 12 months to December 2017.
That’s a rise of £365.5 million, according to The Digital Publishers Revenue Index report from the Association for Online Publishing (AOP) with Deloitte, which looked into UK publishing trends over the last 12 months.
Based on 20 digital publishers, comprising 15 B2C and five B2B publishers, the report found that while total revenue growth was less than when compared to Q4 2016 (9.5%), the 5.6% increase was driven significantly by a 27% annual increase from using display advertising.
Revenue from display advertising last year increased to £189.2m, up from £148.9m in 2016.
Despite the success of display, other revenue streams haven’t been neglected; revenue deriving from subscriptions, for example, increased by 8% to £34 million.
When comparing revenue growth between B2B and B2C publishers, the latter recorded an increase of 8.1% in the 12 months running to December, while B2B publishers experienced a decline of 6.5%.
According to the report, the revenue decline for B2B was largely due to dips in sponsorship (-51%) and recruitment (-13%). However, when it came to subscription revenue, B2B publishers experienced an increase in revenue of 15% year-on-year, accounting for 45% of their annual revenue.
Despite the display advertising format making a positive impact on publishers revenue, confidence on future financial prospects via the medium has experienced a dip from AOP board members at both a company and industry level.
According to AOP’s managing director, Richard Reeves, alternative methods to generate income, such as subscriptions, are becoming the “ever-changing focus” for publishers with user experience a top priority in order to stay ahead of the competition.
Adding to this, Dan Ison, lead partner for media and entertainment at Deloitte, said that the rise of subscription revenue is a further indication that consumers are leaning towards paying for online content, and digital publishers are now appearing to adapt their strategies in order to cater for current media consumption habits.
A shift to alternative revenue streams could be down to ongoing concerns around the trust and transparency of display ads. Clamp-down regulations from the Coalition for Better Ads on intrusive ads and the recent launch of Google’s ad-blocking Chrome browser mean that user experience is becoming more important than ever for publishers to get the balance right with advertising and revenue.
“The challenge going forward will be to maintain exceptional user experiences while respecting and adhering to new regulations, so premium publishers can continue to create original, high-quality content that sets them apart from other platforms.” concluded Reeves.