Digital publisher subs, sponsorship and audio revenue grows as display ads decline

publisher-aop-subs

The latest Digital Publishers’ Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte reveals strong growth in subs, audio, and sponsorship revenues year-on-year (YoY) for digital publishers.

However, overall digital revenue for Q4 2023 was down by 1.8% from Q4 2022, for a total of £174 million.

Subs, audio, and sponsorship growth

Subscriptions and digital audio continued their trend towards growth, increasing by 10.3% and 300% respectively, while sponsorships saw an increase of 31.1%. Combined, these growth areas increased total revenues by £12.6 million.

The “miscellaneous” category also saw significant growth at 117.6%, which is likely attributed to monetisation of first-party data assets.

Display ads fall

A 17.2% fall in display advertising revenues — representing £13.3 million — offset the gains elsewhere, indicating this channel was the prime target for cuts as advertising budgets were tightened last year.

Video advertising revenues fell by 24.5%, but the overall impact was slight as this category represents just 4.6% of total revenues.

Overall multi-platform revenues grew by 17.3%, while mobile and desktop-specific revenues fell by 54.5% and 33.8% respectively, consistent with long-term trends.

Within multi-platform, the drop in display revenues was a modest 1.8%, while the equivalent category fell by 31.2% in desktop and 37.9% in mobile, revealing the primary source of display revenue contraction.

Half (50%) of publishers reported positive revenue growth for the quarter and AOP board member confidence in both their companies and the wider industry saw a slight increase.

All respondents placed new products and non-advertising revenues as top priorities, while cost reductions were a priority for three-quarters (75%) of respondents, up from half (50%) in the prior quarter.

Andy Cowen, lead partner for telecommunications, media and entertainment at Deloitte, said: “This quarter’s results are a wakeup call suggesting that relying on display revenues is a risk for publishers, as subscriptions continue growing year on year.

“Audio meanwhile is a small but bright star, recording a 300% increase this quarter, following a 500% increase the previous quarter.

“Should this trend continue, this currently modest category could become a key revenue driver, and should be a priority for publishers seeking diversified, incremental growth.”

Richard Reeves, Managing Director at AOP, said: “The future of publisher revenues is clearly in diversification, and the gulf between multi-platform and platform-specific revenues widens.

“This is partly down to platform decisions — an 86.4% fall in off-platform revenues on mobile is no doubt tied to Facebook’s decision to cut referrals — but also due to the multi-device nature of modern content consumption and advertisers’ resulting preference for omnichannel campaigns.

“Publishers planning to put their revenue eggs in many baskets would be wise to pay attention to audio’s meteoric growth, as well as the seemingly unstoppable rise in subscriptions.”