Digiday Research: Publishers expect advertising to drive revenue growth in 2019
Update: A previous version of this story incorrectly stated Bustle expects to generate most of its new revenue in 2019 from events. In actuality, it expects events to be its fastest-growing revenue stream next year, but for most of its new revenue to come from advertising overall.
Most publishers expect the majority of their revenue growth in 2019 to come from advertising, despite the challenges they face in the online ad market and their ongoing efforts to cultivate alternative revenue streams.
Of the 91 publishers surveyed at last month’s Digiday Publishing Summit and Digiday Moguls event, 69 percent said advertising is where they expect to see their most significant revenue increases next year. That’s despite many publishers attempting to build new, non-advertising revenue streams such as subscriptions and commerce.
More than any other channel, publishers said they expect to see their biggest revenue growth from video advertising next year, which is perhaps surprising given that some publishers have scaled back their video ambitions and operations in the past year. Companies such as Refinery29 have been downsizing their video operations as video ad revenue lags their expectations. Meanwhile, publishers are at the mercy of changes being made by the major platforms and are coming to terms with those challenges. It emerged recently that Facebook inflated it’s video stats, for example, which may have encouraged publishers to push more heavily into video despite audience limitations.
Behind video, survey respondents also said they expect to see strong revenue gain from display ads and branded content. Those channels play important roles for publishers’ revenues but come with their own challenges. Programmatic display ad revenues are often eroded by exorbitant and hidden tech fees, for example. And publishers are struggling to compete with the efficacy of the data-driven ad products offered by Google, Facebook, Amazon and others. Meanwhile, publishers pushing branded content face shrinking margins and high content production and distribution costs.
Publishers are adopting various tactics in an attempt to eke out more revenue from their display ad operations, including introducing header bidding and switching to vendors operating first-price auctions.
Publishers with growing ad businesses are still seeing revenue growth elsewhere. Bustle, despite increasing its audience size and advancing its programmatic ad business this year, isn’t counting solely on advertising for new revenues. According to its Chief Revenue Officer Jason Wagenheim, experiential events — driven by its recent acquisition of Flavorpill — will be its fastest-growing revenue stream in 2019.
For mature publishers with established ad business, it can be difficult for advertising to generate significant growth compared with newer streams, such as subscriptions or e-commerce, which can scale faster, albeit from a much smaller base.
Camilla Cho, general manager of New York Magazine’s The Strategist, said that its e-commerce business grew 300 percent this past year. And while she declined to say how much The Strategist earns in e-commerce revenues per year, she said it was a “double-digit percentage of New York Magazine’s overall revenue,” and the fastest growing part of its business.
Even though more publishers are getting into the e-commerce game according to Cho, getting people to make purchases online remains tricky.
Advertising, mired in racism, has a long road to recovery
Companies need to respond to the racism row with genuine intentions or not participate in the conversation at all, anything in between can be very disingenuous.
‘The boundaries have broken’: Employers deal with the reality of workers bringing their ‘whole selves’
ven as employers have touted “bring your whole self to work” theorems over the past couple of years, it’s forgotten that that privilege has only really been afforded to a few. For many, bringing your whole selves to work isn’t an option. And the realities of the current work-from-home brigade mean that many haven’t been given a choice: When work is literally in your home, how do you keep it at arm’s length?
How publishers are changing branded content operations to remotely produce high-res campaigns
By using emerging technology like camera drop kits to ensure higher resolution content, branded content studios are able to ensure clients achieve brand safety.
SponsoredVideo: Marketers discuss the future state of less interruptive in-stream ads
In a new video, experts from GumGum, The Martin Agency and Pinterest discuss the future of video advertising — and outline their vision for how video ads can be less disruptive.
MediaMath explores a possible sale
The ad tech company is working with investment bank Centerview Partners on the process -- which could also include a debt refinancing -- according to people familiar with the matter.
With the latest crisis, media needs to back up words with actions
For the media industry, this was a week of introspection -- and a time of decision. For all the progressive ideals espoused by publishers, marketers and agencies, most fall well short when it comes to turning words into action.