Digiday Research: European publishers expect to make more money from branded content in 2019

This research is based on unique data collected from our proprietary audience of publisher, agency, brand and tech insiders. It’s available to Digiday+ members. More from the series →

Income from display advertising may be declining for some European publishers, but they expect that video advertising and branded content will drive new revenue growth in 2019, according to a survey of European publishers conducted by Digiday.

The number of publishers offering subscription products also rose in 2018.

In a survey of 49 European publishers at the Digiday Publishing Summit Europe this October, 78 percent of respondents expect their branded content businesses to increase and none expect it to decline. Meanwhile, 75 percent of publishers said video advertising will increase in 2019 and 10 percent more publishers reported revenues from subscriptions from when similar publishers were surveyed in February of this year.

One-third of publishers surveyed said that they expect display advertising to decline in the next year and the percentage of publishers who counted on display advertising for over half of their revenues dropped from 36 percent to 28 percent. As revenue for display ads declines and publishers develop multiple revenue streams going forward, it makes sense that display ads become a smaller proportion of a publishers revenues.

One publisher executive that wished to remain anonymous said that while its company’s display advertising business didn’t decline in 2018, “[It’s] fair to say that the open marketplace continues to be challenging due to spending being directed at Facebook and Google.” To combat the power of the duopoly, French and U.K. publishers formed coalitions to pool their ad inventory together in an attempt to attract advertisers with larger audiences and a greater availability of first-party data to target users.

Part of the decline in display advertising could be due to the advertising E.U.’s General Data Protection Regulation. An earlier survey of European publishers by Digiday found that 32 percent believe GDPR has depressed their programmatic revenues. Many were also unsure of the role of GDPR and believe it is too early to tell what is a consequence of it or other factors.

But unlike U.S. publishers, which pivoted hard to video and video advertising, European publishers have taken a less extreme approach. European publishers’ revenues from video ads remained relatively unchanged over the course of the year. Increasing income from video ad revenue also does not require a full pivot either. Simple steps like replacing display ads with video units, implementing auto-play ads, or inserting in-stream pop-ups are just a few of the many methods publishers can take to earn more from video.

Aside from display and video advertising, branded content has remained a high priority for publishers heading into the new year. A number of European publishers including the BBC, Hearst UK, and Telegraph, have introduced new metrics and ways of measuring branded content. The demands for more scrutinized branded-content campaigns haven’t just benefitted advertisers though. Peter Lindsay, chief strategy officer at The Telegraph said that by tying certain branded content campaigns to metric performance, the Telegraph has actually been able to increase its revenue per campaign.

European publishers have also been keen to take advantage of shifting consumer trends. Research from last year by the Reuters Institute showed European readers were generally less likely than those in the U.S. to pay for a subscription. Only three countries, Norway, Denmark and Sweden, had a higher percentage of paying subscribers than the U.S. But Lindsay commented, “we’re definitely seeing an increased willingness among U.K. consumers to pay for journalism.”

That increased willingness to pay for journalism may be outpacing potentially stagnating advertising growth. The Guardian had earlier said that it earns more from consumer revenues than from advertising and Politico Europe said subscriptions are responsible for over 50 percent of its revenues.

More nascent alternative revenue streams like events and commerce have also been pursued by European publishers. The majority of publishers who reported revenues coming from the ‘other’ category indicated that they came from events.

Meanwhile, few publishers will likely be able to replicate the success Dennis has had, earning roughly 40 percent of its revenues in 2018 from commerce. Many publishers could follow a similar model to the Telegraph’s where they earn affiliate commissions from small review-based articles. “[We’ve] been exploring affiliate commerce through travel, and found there to be real legs in independent reviews. Affiliate revenue is meaningful. It’s still small, but growing quickly. We’re doing the three things you should see or do in Paris and earning revenues from links on those pages. We’re not trying to compete with Booking.com or TripAdvisor,” said Lindsay.


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