Digiday Research: Where publishers get their revenues, Fall 2018

Of the 91 publisher executives surveyed by Digiday at last month’s Digiday Publishing Summit, 78 percent and 76 percent said their companies have increased revenues from video advertising and branded content respectively in the past year. The majority of publishers with e-commerce or subscription products also saw increases in revenue from those streams.

That roughly three-quarters of publishers are seeing growth branded content may come as something of a surprise, given some of the challenges associated with turning that revenue into profit. Branded content is loaded with hidden fees for publishers that eat into potential profits, and advertisers are questioning its’ effectiveness.

With video, the increases could be attributed to publishers making more video and unlocking more inventory as a result. Earlier Digiday research on publishers this year found 86 percent of publishers plan to increase video production in 2018 Publishers could also be making greater use of formats such as in-article videos, or utilizing tactics like autoplaying muted videos to boost advertising opportunities. Their existing video content could also just be receiving more views, of course.

Revenues from affiliate links continue to represent the majority of publishers’ ecommerce business. Publishers such as BuzzFeed, and PopSugar have also begun to operate online stores. For most publishers these revenue streams are nascent and supplemental income rather than core components of their revenues. Less than 10 percent of publishers in the Digiday survey said ecommerce was responsible for more than 25 percent of their revenues.

Like video, subscriptions often dominate media headlines as publishers like The Daily Beast announce membership plans and publishers look to shore up recurring revenue. But according to the data from Digiday, only 4 percent more publishers are offering subscription plans in the Fall of 2018 compared to in the Spring of 2018.

Publishers looking to create subscription business might have better success if they’re digital-first publishers. Angus Macaulay, Chief Revenue Officer of Stat, a biotech and pharmaceutical based publisher which gets roughly 50 percent of its revenues from subscriptions, believes being a small and relatively new digital-first publisher made it easier to put up a paywall, largely because it was never dependent on display advertising revenues. “Because we’re a digital-first publisher with a highly specific audience, We were never a scale play so we weren’t as concerned about a hit to our audience size like some of the legacy publishers might have been.”

There’s also a challenge for publishers in the amount of content freely available content online. So when deciding on whether to purchase a subscription Macaulay adds, “[people] will pay for differentiation, it’s not like people will pay for something that they can get two clicks away.”

Lastly, fewer publishers are dependent on display advertising as the market for display advertising erodes. The percentage of publishers that rely on display advertising for at least half of their revenue dropped from the 38 percent to 29 percent. Twenty percent of publishers surveyed by Digiday at the event actually reported a decrease in their display ad revenues.