Research Briefing: Publishers’ revenue sources are top of mind at Digiday Publishing Summit

This article is part of Digiday’s coverage of its Digiday Publishing Summit. More from the series →

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In this week’s Digiday+ Research Briefing, we examine which revenue streams were top of mind for publishers at the Digiday Publishing Summit, how TikTok is getting even more marketing spend from brands and retailers despite facing a potential U.S. ban, and how Disney is rolling out DRAX Direct, a direct integration with the industry’s largest DSPs, as seen in recent data from Digiday+ Research.

76% of publishers will focus on growing direct-sold ads in 2024

The Digiday Publishing Summit wrapped Wednesday in Vail, Co., and publishers’ revenue priorities was a hot topic of conversation during discussions with industry leaders. Hearst Magazines is using its digital membership model to grow its e-commerce marketplace business, while Forbes is testing its SSPs to improve programmatic ad revenue, and Bustle Digital Group is focusing on events to grow and monetize its audiences.

Hearst’s e-commerce marketplace is just over a year old, but is already proving that publishers with categorical authority and expertise on topics have a better chance at selling products to readers — sometimes at a higher commission rate. Hearst’s affiliate and commerce revenue was up in 2023 year over year, according to Sheel Shah, Hearst Magazine’s svp of growth.  Shah’s been focusing on drop ship deals with third-party retailers to populate the marketplace. A typical drop ship agreement can net Hearst 25-30% commission rates, with luxury products yielding a little more.

Live events are proving to be a successful way to engage and grow Bustle Digital Group’s audience, according to Wes Bonner, svp of marketing and audience development and head of social at BDG. Revenue from live event sponsorships has grown by 200% from 2022 to 2024, Bonner said. BDG runs five large-scale events every year around tentpole moments — including Coachella, Art Basel and F1 — with about 10 to 20 sponsors paying for full activations. Bonner noted that BDG was able to measure an additional 55 million earned social impressions that were generated by a Kate Spade-sponsored New York Fashion Week event in February, “by just tracking who was there and what they were sharing in that 24-hour time frame.” 

Overall, publishers’ 2024 revenue priorities lie with direct-sold ads this year, according to Digiday+ Research surveys of more than 150 publisher professionals. Seventy-six percent of publishers said in Q1 2024 that they will put a large or very large focus on growing their direct-sold ads business in the coming months, up from 63% in Q1 2023. Direct-sold ads also remain the top revenue source for publishers — 84% of publisher pros said direct-sold ads account for at least a very small portion of their revenue in Q1 2024.

On the programmatic side of the business, Forbes has run a series of tests with its supply-side platforms to improve the ad tech firms’ contributions to the publisher’s revenue. Forbes started with a single SSP and found that the revenue coming through the existing integration with the SSP remained consistent, “and surprisingly, we actually started to see some revenue doubling in a different integration versus the one that we had previously,” said Rebeca Solórzano, svp of programmatic operations and strategy at Forbes. 

Keep an eye out for Digiday+ Research’s in-depth report on publishers’ revenue sources coming out in April.

The stats:

  • More than three-quarters of publisher pros (82%) said in Q1 2024 that they get at least a little revenue from programmatic ads, making programmatic ads publishers’ second revenue stream, after No. 1 direct-sold ads. 
  • Affiliate commerce saw the biggest drop in share of publishers’ revenue between last year and this year. In Q1 2023, nearly two-thirds of publisher pros (62%) said affiliate commerce accounted for at least a very small portion of their revenue. In Q1 2024, less than half (45%) said the same.
  • Slightly more than half of publisher pros (52%) said in Q1 of this year that they would focus at least a little on growing their events business in the next six months, compared with two-thirds (67%) who said the same in Q1 of last year.

Read more about publishers’ 2024 revenue priorities

Digiday+ Research digest

TikTok’s seemingly had a rough few months. Marketers are making contingency plans as the platform faces a ban in the U.S. (again). Meanwhile, TikTok lost U.S. users for the first time in Q4, according to a report from Business Insider. But none of this is affecting how much brands and retailers are spending on marketing on the platform — at least not yet. This is according to a Q1 2024 Digiday+ Research survey of brand and retailer professionals. In fact, the survey found that brands’ and retailers’ marketing spend on TikTok is actually growing.

The stats:

  • The percentage of brands and retailers spending a lot on TikTok has been trending upward. In Q3 2022, just 7% of brand and retailer pros said their companies spent a large or very large portion of their marketing budget on TikTok. That percentage rose to 17% in Q3 2023 before hitting 29% in Q1 2024.
  • Despite the growth in spending on TikTok, the platform doesn’t rank very high when it comes to driving conversions or branding. Only 22% of brand and retailer pros said that TikTok is the social channel that is best for driving conversions, putting TikTok in third place in this category, behind No. 1 Instagram and No. 2 Facebook.
  • Engagement is far and away brands’ and retailers’ main measurement of success on TikTok — which is a different look, compared with Facebook and Instagram, where brands measure success with sales. Forty-one percent of brand and retailer pros said engagement is the main measurement of success for their marketing efforts on TikTok.

Read more about brands’ and retailers’ TikTok spending

Disney is expanding its Disney Real-Time Ad Exchange (DRAX) with the launch of DRAX Direct, a direct integration with the industry’s largest DSPs. Disney hopes DRAX Direct will help it generate more than 75% of its ad revenue through programmatic sales by the end of 2024. Google’s DV 360 and The Trade Desk are DRAX Direct’s launch partners and will unify access to streaming inventory across Hulu and Disney+ for advertisers of all sizes, according to Disney. Hulu was second only to YouTube as the ad-supported streaming service that received the largest portion of marketers’ budgets and ad placements in 2022, according to a Digiday+ Research report on ad-supported streaming services. Keep an eye out for our updated report on ad-supported streaming services publishing in April. 

Insights and stats:

  • Slightly more than half of brand and agency survey respondents (52%) said they currently placed ads on Hulu as of Q1 2023, and 23% of respondents said they devoted the largest portion of their 2022 ad budget to Hulu.
  • Cost of media and lack of scale were the biggest challenges brand and agency respondents said they faced on Hulu. Fifty-six percent of respondents said cost of media was their largest hurdle, while 44% said it was lack of scale. 
  • “Now we are going to be able to have a direct integration with The Trade Desk into our tech stack that will improve all the value we’re providing to marketers.” — Rita Ferro, president, global advertising at Disney, noting that Disney’s clean room partnerships and integration with Google PAIR will help deliver scale.

Read more about marketers’ challenges and success metrics on streaming services

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