AOP and Deloitte reveal that industry confidence increased by 33% in Q1 2019 compared to Q4 2018, despite a fall in publisher revenue
London, UK, 2nd July 2019: Digital publishing revenues declined by 11.2% in Q1 2019 compared to Q1 2018, but publisher confidence rose, according to the latest Digital Publishers Revenue Index (DPRI), a quarterly report on UK publishing from the Association for Online Publishing (AOP) and Deloitte.
The report shows that digital publisher revenues decreased by 1.2% on a 12-month rolling basis to March 2019. Proportionally, the largest drop in revenue came from video, which fell by 10%, followed by sponsorship (6%) and display advertising (1%). Subscription revenues saw an increase of 4% during the same period.
Despite the overall reduction in revenue, AOP board member confidence on financial prospects for their company increased by a significant 56% in Q1 2019 compared to the previous quarter. For the industry overall, confidence increased by 33%. The low levels of AOP board member confidence in Q4 2018 preceded the decreased revenues in Q1 2019, and so it will be telling to see whether revenues rebound in Q2 2019.
B2C publishers experienced the largest decline in revenues in Q1 2019, with a 14.4% decrease compared to the same quarter in 2018. This included decreases in revenues from display (-17%), video (-48%), and sponsorship (-19%). In the same period, subscription revenue continued to increase, growing by 19%. B2B publishers fared better in Q1 2019, with an 8.8% increase in revenue compared to the same quarter in 2018, driven largely by sponsorship, which increased by 85%.
The DPRI report also signalled the continual shift to multi-device campaigns in Q1 2019 compared to Q1 2018, with a rise in multi-platform revenue, which increased by 120% from £45.8m to £100.8m. Across the same period, revenue from mobile-only and desktop-only campaigns dropped by 45% and 82% respectively.
Overall, the last 12 months have seen significant changes in how AOP members are prioritising future growth, with 67% suggesting the introduction of new products and services or expansion is a priority strategy. Non-advertising revenue growth is still a high priority for 78% of AOP members.
Richard Reeves, Managing Director, AOP, commented: “The last year has undeniably brought uncertainty to the industry, as we wait to see the full implications Brexit may bring. The coming months are going to be challenging for digital publishers, but it is encouraging to see optimism has increased so significantly after a tough first quarter and we hope this will be mirrored by an increase in revenue in the next DRPI report.
“Once again we are seeing an increase in multi-platform revenue as advertisers shift to campaigns which target users seamlessly across devices. We also continue to see a trend for digital publishers to explore alternative revenue streams to advertising, with subscriptions performing particularly well. There are some fantastic examples of innovation in this area, with publishers offering consumers options on how to consume content that best aligns with individual preferences, all pointing to the need for tailored, personalised user experiences.”
Dan Ison, lead partner for telecoms, media and entertainment at Deloitte, commented: “Consumer appetite for online media shows no signs of abating and, despite an uncertain business climate, it’s reassuring to see that the majority of online publishers are forecasting an uplift in revenues. They are right to do so: our research shows that half of UK adults will have at least four online-only media subscriptions by the end of 2020, up from two in 2018, the market is still poised for growth. The focus should now be placed on diversifying offerings, making the most of campaigns across a range of platforms and producing high-quality content.”
About the DPRI Report
The Q1 2019 DPRI report – conducted by AOP and Deloitte – is based on a survey of 21 UK digital publishers comprising 15 B2C publishers and six B2B publishers. The aim of the report is to provide an overview of revenue levels across multiple channels and platforms – as well as insight into publisher sentiment – and to benchmark these findings against previous quarters. The information contained in this press release is correct at the time of going to press.
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