Commentary

Europe's Digital Publishers Face Ad Woes Similar To U.S. Companies

Digital publishers in the United States, like BuzzFeed and Vice, aren’t the only companies grappling with slowing revenue growth. Their counterparts in Europe also have faced difficulty with ad-supported business models.

The Reuters Institute for the Study of Journalism just published a report based on interviews of 13 leaders of “digital native” media companies in France, Germany, Spain and the United Kingdom. The report is a follow-up to a 2016 study.

The Reuters researchers talked to Brut, Les Jours, Mediapart, Correctiv, Krautreporter, CTXT, El Confidencial, El Espanol, the Bureau of Investigative Journalism, the Canary and three editions of HuffPost in France, Spain and the U.K.

Competition is intense in European online news, and several high-profile publications closed in the past year. BuzzFeed France, which had a slim staff of 12 people, shut down amid a broader company restructuring. Unilad, a U.K. viral publisher on Facebook, filed for bankruptcy protection and was acquired by rival LADBible.

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The Reuters Institute’s study had four key findings about Europe’s digital publishers:

• Advertising remains vital as a source of revenue, despite difficulties with this kind of business model.

• Digital news media is now a well-established part of the media landscape and faces similar pressures as traditional print and media companies. News organizations are focused on lean, sustainable operations with diverse revenue sources.

• Digital publishers are balancing the risks and opportunities of working with Facebook and Google, while making choices about key audience groups to target to avoid overdependence on the duopoly.

• News organizations are emphasizing quality over quantity, looking at how to connect with nontraditional audiences as political populism exerts more influence.

Urging readers to pay for a subscription — a business model that’s gaining more traction in the United States as publishers enforce stricter paywalls — is a key challenge. Some digital publishers also compete against bigger media companies that provide free content.

El Confidencial, a digital-only publisher in Spain, exemplifies the quandary faced by Europe’s digital publishers. While it’s the top-ranked digital news publishers, it ranks No. 4 behind the websites of traditional dailies El País, El Mundo and La Vanguardia.
El Confidencial is exploring new sources of revenue as programmatic advertising declines, including subscriptions.

“If you decide to make people pay for your content, you’re losing that kind of ideal world in which El Confidencial contributes to a better society,” said Alberto Atero, El Confidencial’s executive director. “You’re losing by making people pay.”

The report doesn’t mention regulatory changes that also have affected publishers, such as the European Union’s privacy law that went into effect in May.

The General Data Protection Regulation compelled publishers to spend money developing internal “consent management platforms” or outsourcing the work to companies like Iubenda, Cookiebot or OneTrust.

Another contentious issue is the so-called “link tax” that’s part of proposed EU copyright legislation. The law would force Google and Facebook to pay billions of dollars to publishers for showing news clips or links to news stories on other sites.

Europe’s biggest news providers support the proposal, having accused Google and Facebook of “plundering” the news and ad revenues.

As such, Google may shut down its Google News aggregation service to avoid the fees. That may kill off a key driver of web traffic for some publishers. The legislation faces a final vote in the European parliament next month.

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