Category: In the News

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Digital Publishers Experienced Decline in Ad Revenue Prior to Pandemic

With headlines on publisher revenues declining and budgets being slashed, a new study has found that digital publishing revenue was reducing prior to the Coronavirus pandemic.

According to data from the Association of Online Publishers (AOP) and Deloitte’s quarterly report, based on 21 UK digital publishers comprising 15 B2C publishers and six B2B publishers, digital publishing revenues declined to £131.1m in Q4 2019, a 6.2% fall in comparison to Q4 2018.

Meanwhile, revenue from subscriptions and sponsorship rose by 24% and 10% respectively in the last quarter of 2019 compared to the same quarter in 2018. However, growth in these areas failed to offset significant declines in display advertising and recruitment, which were down by 22% and 20% respectively.

Just over half (53%) of publishers reported revenue increases in Q4 2019, down from 58% who said the same in Q4 2018.

The proportion of publishers reporting high growth, however, grew year-on-year, with 24% reporting growth in excess of 25%, a rise from 16% who reported the same in Q4 2018.

Total digital revenue was down by 6.3% in 2019 compared to 2018, primarily driven by a significant downturn in advertising display formats of almost 18%, and a smaller decline in online video at just under 7%.

However, there was positive news with subscriptions seeing a near 16% increase, partially offsetting the impact of the decline in advertising revenue.

“As households and business leaders remain cautious of discretionary spending during COVID-19, communicating the value of subscriptions will be fundamental in ensuring revenue growth in the year ahead. In the longer term, subscription revenue will grow in importance as a solid bedrock for publishers looking to diversify their business models,” commented Dan Ison, lead partner for Telecommunications, Media and Entertainment at Deloitte.

According to a survey of AOP board members on the year ahead, taken as the implications of COVID-19 were becoming clear, the proportion of AOP board members confident in the financial prospects of the digital publishing industry dropped by 80 percentage-points from the previous quarter, reflecting the uncertainty across the industry.

Similarly, the proportion of participants confident about the financial prospects of their organisation’s digital business fell by 93%.

The survey also found significant shifts in digital publishing strategies. 60% now cite advertising revenue growth, non-advertising revenue growth and cost reduction as a high priority for their business over the next 12-months. 

In comparison in Q1 2019, 100% cited non-advertising revenue growth as a high priority, while 67% were prioritising cost reduction and the introduction of new products, services or expansion. Just 40% cited the introduction of new products, services or expansion as a priority in the latest member survey.

“Publisher plans in 2019 looked primed on diversifying revenue sources in 2020, but a difficult Q4 2019, and tougher times ahead indicate this is to be stifled as publishers retract to their core services,” said Richard Reeves, managing director at AOP.

“While digital publishers have been seeing great audience figures during the global pandemic, this has not been matched with advertising revenue coming in and so we expect to see publishers place a greater emphasis on alternative revenue streams such as e-commerce to compensate. Collaboration has always been to key to addressing industry challenges, and in difficult times we often see true innovation. With seismic change on the cards, digital publishing could well reshape for the better over the next 12-months,” he added.

The post Digital Publishers Experienced Decline in Ad Revenue Prior to Pandemic appeared first on PerformanceIN.

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News publishers new tactic: Emphasize the good news to lure back coronavirus-weary advertisers

In trying to sell ads against their coronavirus coverage, news publishers have gone through a Kubler Ross-esque progression. First, they got angry that there was zero appetite for direct sponsorship of news; next, they tried to minimize the presence of words like coronavirus in their stories. Now they are trying to focus on the positive, highlighting packages of stories of civic, economic and public recovery, and they appear to be having some success.

The Boston Globe has gotten one advertiser to sponsor a private Slack channel it built to help small business owners share information and get answers to questions about things such as the Small Business Administration’s Paycheck Protection Program, and is talking to a second advertiser about building another one, Boston Globe Media chief commercial officer Kayvan Salmanpour said.

Time, which has focused much of its Time 100 Talks programming on how people are coping and recovering from coronavirus, has secured more than $1 million in sponsorship revenue for those talks over the past several weeks, global chief revenue officer Viktoria Degtar said. A separate collection of stories, “Apart, Not Alone,” about people who are helping people cope with the pandemic, landed State Farm as a sponsor.

A video series NowThis News launched last month, “In This Together,” which highlights the ways that people are getting through this, has attracted several sponsors.  

And later this month, Gannett will be launching a large package across its USA Today Network exploring the recovery of the American economy at both the national and the local level. Local editors have been encouraged to write op-eds about their commitment to their local communities, and to produce sidebars focused on the local economy, per Poynter’s Rick Edmonds.

Not every publisher is framing its pitches to advertisers in this way. While seemingly every advertiser’s message – and every publisher’s pitch – focused on themes like relief and support for frontline workers in late March and early April, a slightly narrower band of publishers can offer this kind of coverage to brands.

“I wouldn’t say it’s in every RFP,” said Steven Bloom,
managing director of enterprise partnerships at Omnicom USA. “But there’s
definitely a market for these. It’s a logical progression from the immediate
relief [theme].”

Bloom said he’s noticed more advertisers investing in
campaigns oriented around themes like recovery in the past few weeks. And while
national advertisers are interested in spending, in the near term, the
publishers that are best situated to win those budgets are those that can speak
to local communities. “The recovery is going to be unequal,” Bloom said. “There’s
going to be varying degrees of recovery [from market to market].”

In the early days following the spread of coronavirus, many
advertisers paused their spending, in large part because the creative assets and
campaigns they’d planned to roll out suddenly felt tone-deaf or inappropriate.

Once they came back, many settled on packages that focused on the heroes battling the virus.

Local publishers benefitted. A Boston Globe package saluting the nurses on the front lines of the effort drove more sponsorship revenue than any special package in the Globe’s history, Salmanpour said, partly because the Globe’s sales team was able to get both national and local advertisers involved.

“Anything that’s about supporting or highlighting an important community,” Salmanpour said. “Packaging it so there’s small price packages and large price packages, and having the whole team rally around it, and have a give-back element in it, that works.”

Over the past few weeks, however advertiser interest has shifted. “It’s not about the hero thing anymore,” said Josh Brandau, the chief revenue officer of the Los Angeles Times. “It’s about what we can do to reopen the economy.”

Brandau said that a number of categories that had paused their spending, such as automotive, have begun to come back, and they are most interested in campaigns that explain what is going on. “It’s almost an awareness thing,” Brandau said. “It’s more, ‘Here’s what we’ve done to make this safe.’”

That service-oriented goal also allows some publishers to
frame themselves as providing service and value to their readers. “No brand has
come to us asking about ‘recovery and rallying,’” said Viktoria Degtar, Time’s
global chief revenue officer. “We have been in the market ensuring that brands
see the value or utility we provide them.”

In the case of Time’s
coronavirus newsletter, for example, Goldman Sachs had a great deal of branded
content that it wanted to distribute, and the newsletter provided a great
vehicle and environment for that content, Degtar said.

The publishers that are able to whip up sponsorship opportunities quickly will benefit most, at a moment when brands are trying to be nimble in their ad spending.

“In this environment, we need to reevaluate the speed at which our team receives, responds and creates opportunities,” Degtar said. “What was a year is now a month, what was a week is now a day, what was a day is now a few hours.”

The post News publishers new tactic: Emphasize the good news to lure back coronavirus-weary advertisers appeared first on Digiday.

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