U.S. and U.K. publishers have much in common. Both groups are concerned about the rise of ad blocking, figuring out how to increase mobile revenue, scaling video, boosting programmatic ad yields and monetizing off-platform content. But they also have their differences.
AOL polled 600 publishers across the U.K. and U.S. in May — 300 in each country — to gauge what the core issues are on either side of the pond.
Here’s a breakout of where they align and where they differ:
Publishers are prioritizing off-site monetization
One priority for both American and British publishers is off-site monetization. A full 86 percent of U.K. publishers rely on third parties — namely Facebook and Google — for a quarter of their traffic, according to the report. News U.K.’s digital strategy and business development director Hamish White thinks that a quarter is suspiciously low. He declined to reveal what referral traffic The Sun receives from Facebook but said that respondents in the survey are either “underplaying their numbers” or “missing a trick” in capitalizing on what Facebook can offer.
Facebook’s Instant Articles worries publishers due to the data, content and commercial control they have to cede to the platform. “It’s nerve-wracking for us,” said White, who described the relationship between publishers and Facebook as “febrile.” Still, he said he’s confident Facebook is making the right noises in terms of helping publishers monetize. “The introduction of branded content within Instant Articles and the ability to put high-yielding video in there is really interesting for us,” he added.
Video is a beacon of hope
Most U.K. and U.S. respondents picked video as the No. 1 revenue driver for 2017. More than half of U.K. publishers and 56 percent of American publishers cited better-quality creative as the primary driver.
British national newspaper group Trinity Mirror is seeing the lion’s share of ad budgets weighted toward video, according to programmatic director Amir Malik. “There’s a huge internal push within news publishers to the production of video content and to accompany every article, by principle, with a video,” he said.
Yet video in the U.K. is still hampered by a lack of supply. Scaling it isn’t easy — and just saying that video is the predicted core revenue won’t make it true.
“There’s no doubt video is playing a more vital role, but many publishers don’t have video inventory. There’s also a quality issue when it comes to production. It’s not an easy thing to scale,” said Rob Bradley, data and digital revenue director, CNN International’s commercial unit.
A slightly higher proportion of Americans (53 percent) cited making video ad targeting more individually relevant to viewers as a core driver for video, compared to 51 percent in the U.K. But there was a more marked difference between importance of ad-load time to growth: 53 percent in U.K., and 48 percent in U.S.
Digiday Daily Newsletter
“The U.K. market lags behind the U.S. The viewability conversations and optimizations to improve mobile advertising by improving the page-load times have already happened Stateside,” said The Economist’s global head of digital products revenue, Ashwin Sridhar.
Well over a third (37 percent) in U.K. think growth will be driven by a shift from other ad types, like display; 39 percent of U.S. publishers agree.
Ad blocking is an obstacle to mobile growth
Although ad blocking has predominantly caused desktop revenue to suffer, it’s clear publishers aren’t taking mobile for granted. Most publishers (85 percent) in the U.K. have seen up to 50 percent growth on mobile revenue in the last year, though that’s likely to be from a low base. More than half (55 percent) of U.K. publishers cited ad blocking as the biggest barrier to mobile growth, compared to 49 percent in the U.S.
Tech tax “tyranny” is alive and well
Publishers are still prey to what AOL refers to as “technology tax”: money that gets lost in the ad-buying process between the multiple ad tech vendors acting as middlemen, each claiming a slice of revenue. Around 40 percent of U.K. publishers rely on between five and 10 vendors (same in U.S.), and 25 percent use more than 11 in the U.K, compared to 30 percent in the U.S. Still less than half of the ad media spend goes to the publisher on both sides of the pond.
Header bidding is getting popular
Although header bidding is being used by roughly half the publishers in the U.K. and U.S., it seems more popular in the former. Nearly all (90 percent) say they will have it in place within the next year (43 percent are already using it) or will start using it next year. Those using it in the U.S. are less sure they’ll continue with it: 22 percent of the 50 percent using it say they either aren’t certain they’ll continue with it or have no plans to install it.
“If you’re not using header bidding, you’re losing out on a lot of money,” said Trinity Mirror’s Malik. “It’s a way of winning back ad revenues with strong yields from the disintermediation parties such as Google and Facebook.”
But U.S. publishers simply have a lot more scale, and header bidding works best when there is fierce competition. CNN International’s Bradley said yield is important to everyone, but when scale is more limited like it is in the U.K., the emphasis is more on yield. “Publishers must squeeze as much out of each impression as they can,” he said.