Publisher’s digital revenue remained static in Q1 of 2023, with subscriptions enjoying strong growth while display advertising and online video took backward steps.
The Association of Online Publishers (AOP) and Deloitte have revealed in the latest Digital Publishers' Revenue Index (DPRI) that revenue for Q1 2023 was £151.8m, just 0.1% more than Q1 of 2022.
Subscriptions continued to see the strongest growth for a second consecutive quarter, up 18.3% compared to this time last year, indicating that amid cost-of-living pressures consumers remain willing to pay for content.
Both display formats and online video revenues declined by 11.7% and 10% respectively compared to Q1 2022, this follows a static past 12 months for both categories.
Desktop is out and multi-platform is in
Desktop revenues continued its steady decline, dropping 11.5% year-on-year. Previously experts had suggested this decline was due to consumers switching to mobile platforms but somewhat surprisingly, mobile revenues fell a whopping 17.5% when compared to Q1 2022.
Multi-platform revenue - defined by the AOP as revenue from campaigns that encompass multiple devices or digital channels - appears to have prospered from this shortfall, rising 7.2% year-on-year and accounting for £109.6 million of total digital publishing revenue.
The greatest percentage boost was seen in digital audio, with revenues up a massive 283.3% since this time last year, rising from £600 thousand to £2.3 million indicating an exciting scope for growth in this sector as it still remains a relatively modest proportion of overall revenue.
Publisher sentiment is positive
Digital publishers’ sentiment indicates strong levels of confidence in future advertising revenue growth, with 75% of respondents reporting strong confidence compared to just 50% in Q1 2022.
Confidence in non-advertising revenue has increased by an even greater margin, up from 66% to a perfect 100%, largely due to the continued growth of subscriptions.
Despite this optimism however, it’s worth noting that the lack of overall revenue growth year-on-year may be cause for concern. There are also signs that economic pressures are being felt by digital advertisers, with 75% prioritising cost reduction of the next 12 months, a 25% increase on Q1 last year.
“Publishers cannot be complacent”
Dan Ison, lead partner for telecommunications, media and entertainment at Deloitte, said: “While subscription growth remains steady, publishers cannot be complacent. Consumers continue to adapt their shopping behaviours to maintain overall living standards as a result of high inflation.
“It’s no surprise that digital audio has seen an uplift in interest, especially after it has become a media form favoured by consumers post pandemic. Digital audio is an engaging format, helping to reach niche audiences and its notable ascent in revenue this quarter shows the potential it has, signalling the need for publishers to make further investments in this area.”
Richard Reeves, Managing Director at AOP, added: “The growth of the multi-platform category shows that publishers are pursuing more complex and ambitious revenue streams and moving away from risky eggs-in-one-basket approaches. This talks to the fact publishers are having more big brand conversations and more direct dialogue with advertisers and agencies.”