Many digital publishers rely on display advertising as their main route to driving revenue growth, be it programmatic or direct. But trends continue to show that it pays more than ever to diversify revenue streams.
The Digital Publishers Revenue Index (DPRI) for Q3 2022 shows digital publishing revenue grew by 2.7% from the previous year with steady growth from both display advertising and subscriptions revenue.
Those stats reinforce why digital publishers need to double down on their digital product strategies and development plans.
Why digital revenues are growing
Many online publishers are seeing an uptick in digital revenues across b2b and b2c sectors, despite additional pressures on spend through the cost-of-living crisis. So what's powering this growth?
People will pay for great content
Subscription revenue is up 12.1% on Q3 of last year thanks to publishers and audiences alike seeing the value in unique, high-calibre content to cut through the noise of social media and free/ads-led output.
A report by lineup last year demonstrates that the pre-Covid concern of 'subscription fatigue' proved to be unfounded. During the crisis there was a notable shift towards digitally-fulfilled subscriptions that is here to stay.
As sustainability continues to gain prevalence in consumer decisions, only the highest of quality print products will endure. Print is by no means dead but the lower end of the quality spectrum is definitely on its last legs as audiences feel more inclined to justify their environmental impact. Reading material online is part of our day-to-day so unless the print product adds significant value to the experience, it's destined for closure.
The cost of paper
Readers are not alone in driving this decline, the rise in paper costs has decimated the margins of low value print product models, with zero hope of a turnaround.
Meanwhile...ad revenue has flourished
Despite ad blocking features to combat more intrusive advertising, marketing budgets are being channeled increasingly to digital channels following audience behaviours and consumer patterns. With a whopping 13.9% growth on Q3 2021 according to the DPRI report.
How to drive and diversify digital revenue
Even with growing display ad revenues, the increasing restriction on target based advertising in today’s digital landscape and volatility of ads revenue, it makes sense for publishers to evolve what they do to drive revenue to their brands.
There are plenty of practical ways that publishers can take to increase revenue.
Readers are increasingly open to paying for high quality, trustworthy content. And an advert-free reading experience is equally desirable - we're looking at you, ad blocker users.
Growing numbers of publishers are adopting a variety of subscription strategies, which broadly fall into several categories.
- Hard paywalls - only subscribers can access content;
- Metered paywalls - website visitors can access a set amount of articles for free, before getting asked to subscribe;
- Freemium paywalls - visitors can read selected content, with advertising, without charge. Readers then pay for ‘premium’ content.
- Dynamic paywalls - a personalised approach where the paywall shows based on a user’s behaviour and audience segment.
Have you ever noticed that some online publishers review or promote the products and services of specific brands? Many of those publishers do so because they get paid to promote other brands. Authoritative online publishers can consider sponsorship deals with big-name brands to increase their digital revenue.
Audio continues to grow as both a method of consuming content and commercialising it. According to the IAB Podcast Ad Revenue 2022-2024 Projections steady double digit growth is still predicted for the next couple of years.
Publishers create audio (or video) podcasts on a subject relevant to their content focus and market them through their own channels, as well as through podcast players. According to the report, category diversification is accelerating spelling great news for niche, specialist publishers. Revenue is earned through sponsorship deals or advertising, with the added advantage of promoting all other channels within the brand. Pre-roll and dynamic ad insertion is on the rise with grown seen on host and announcer-read ads too.
Publishers are already content rich. With a few tweaks newsletters can become another income stream. With an existing database of content thirsty readers with an interest in the brand's topic areas. And there are companies that want to reach those very people. A well designed newsletter with an advert from relevant advertisers offers great click through potential. And remember to track open rates and times to optimise it even further.
Diversify your digital revenue
It's no surprise to us that, according to the DPRI, digital product development and innovation remains high priority for 100% of respondents.
Find out how we can help your brand transform its digital revenue strategies