The latest Digital Publishers Revenue Index (DPRI), from the Association for Online Publishing (AOP) and Deloitte, shows that in the year to June, subscription revenues are up 15%. On the advertising side, sponsorship has grown 19% and video has leapt a massive 75%. To be fair, and for balance, display is up nearly 10% too.
However, the important point from the research is that mobile is becoming the dominant channel -- and that naturally suggests that display will be superseded. On the small screen, the tiny buttons and banners are less impactful. The larger formats that some publishers resort to as they bid to gain more attention are just way too intrusive and drive users to download ad blockers.
So although display is growing, the future has to belong to less intrusive formats, and that's exactly where sponsorship comes in. The Guardian is a good resource to check out here. Many of its sections are sponsored by a clearly labelled brand. Then there's the industry-wide native advertising growth that is putting advertisers' message in the news flow, where the action is, instead of screaming out at readers from the edges of the page.
Given that the internet is now highly visual, it's not a major surprise to see video advertising income showing the biggest growth year-on-year. Make it entertaining and a video ad playing in the background (with the audio off please!) will get far more attention than a banner flashing an announcement about an end-of-season sale. We've all become accustomed to mentally filtering out display, but our eyes simply can't help but be drawn to moving images.
It's also encouraging to see that publishers are not entirely reliant on sponsorship, native and video ads for new growth. The rise in subscription revenues can only be good news -- as, at least in some quarters, readers move away from an expectation of all content being free to consume. With Facebook offering to pass on new subscribers to publishers without taking a cut in revenue, this can only be a revenue stream that will continue to grow.
So it's a quick snapshot, but if you want to know the exciting areas in online advertising for publishers, look no further than sponsorship and native as well as video -- particularly mobile video. Expect display to help keep the lights on, but its light is fading fast compared to less intrusive formats that take the advertising to the heart of where the user's attention is focussed on the small screen.