Publishers are still struggling to monetise their traffic on smaller screens though are optimistic digital advertising will continue to grow over the next 12 months.
The status check from the Digital Publishers Revenue Index Report from the Association of Online Publishers (AOP) and Deloitte found that growth in mobile spend plummeted between the first and second quarters of the year. Growth in mobile revenue dropped from 80 per cent to 21.5 per cent in the first six months of the year, a decline emblematic of the mounting issue publishers’ face trying to snare mobile budgets away from the likes of Google and Facebook.
Despite not producing their own content, technology companies have moved quickly to make it easier for advertisers to target people on the go; whether it’s Facebook promising to target “real people” and not cookies through its Atlas ad platform or Google giving developers new tools to premiumise smaller screen inventory, publishers are at risk of being left only morsels of ad budgets. It gets worse for media owners because they still haven’t worked out how to make the most from smaller screens that hold fewer ads and also command cheaper ad rates than on desktop.
AOP managing director Tim Cain said: “The Q2 report once again highlights that advertising revenue reflects the increasing consumption of media on mobile and will remain a key focus for publishers during the next quarter. Publishers and advertisers alike need to recognise the impact of cross device, particularly mobile, when planning budgets and understand the value different devices hold along the path to purchase.”
Publishers stuttering attempts to cash in mobile was not enough to dampen their confidence that digital revenues will continue to grow. The report revealed that all the 23 AOP members surveyed expect to see growth from digital advertising over the next 12 months, with 26 per cent of those posting annual growth of more than 25 per cent for the first time in five successive quarters.
Howard Davies, media partner at Deloitte, said: “Publishers are now aiming to achieve growth through increasing advertising revenue rather than simply cutting costs. The optimism surrounding digital marketing is refreshing to see. This sea-change is largely down to the continuing growth of mobile and video advertising revenue that has been prevalent in the last 12 months and looks set to continue.”
The findings chime with the latest ABC consumer magazine audit, which revealed that digital still has a long way to go before it completely offsets the dip in print circulation. The number of people opting for digital subscriptions instead of hybrid print and digital offers is increasing but total magazine sales are continuing to fall, forcing them to experiment with new ways of generating reader revenue such as ecommerce and events.