Commentary

Top-Line Growth Emerges As Key Priority For Digital UK Publishers

Digital publishers in the United Kingdom said in a survey they are more focused on advertising revenue growth than they were a few months ago, a sign of cautious optimism about a recovery in media spending.

The findings are relevant for U.S. publishers as online media consumption remains elevated among millions of people stuck at home amid the federal government's feckless vaccination effort.

The percentage of U.K. publishers that said they view ad revenue growth as a "high strategic priority" for the next year surged to 78% in the third quarter of 2020 from 0% in the prior three-month period, according to the Digital Publishers Revenue Index from the Association of Online Publishers and consulting firm Deloitte.
The difference is understandable, given that the second quarter was low point for media spending. Many advertisers canceled or delayed campaigns when lockdowns went into effect in various Western European countries.
The portion of publishers that are prioritizing nonadvertising revenue growth jumped from 60% a year earlier to 89%, indicating that reader revenue is an essential part of their marketing strategies. In the U.S., most publishers have reported significant gains in digital circulation revenue as they harden paywalls and urge readers to support fact-based journalism.
Publishers also are more frugal, with the portion of survey respondents, saying cost reduction is a high priority rising to 56% from 33% a year earlier. Ideally, any revenue growth would lessen the pressure to cut jobs; the Press Gazette in August estimated that news organizations let go of 2,000 workers during the pandemic.

Total digital revenue for consumer publications slipped 1.6% from a year earlier to 113.7 million pounds ($157 million) in the third quarter. Business-to-business publications fared better with a 4.1% increase to 11.7 million pounds for the comparable period, amid a 15% gain in display advertising and 5% rise in subscription revenue.
About half (53%) of digital publishers saw revenue growth in third quarter, compared with 22% in the prior three-month period. Subscription revenue jumped by 51% among the 18 publishers that participated in the survey. Unfortunately, that grow only partly, offset the 3.9% slide in digital display advertising, 39% decline in online video ads and 64% drop in help wanted ads, among the revenue categories measured.
The results are encouraging as publishers work to boost their digital revenue, demonstrating their power to deliver audiences to advertisers in a brand-safe environment among premium content.

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