Leading publishers in the UK expect their revenues from digital to grow 15% this year, with increased focus on technology and data to boost ad and subscription revenues, according to a new survey.
The survey, from the Association of Online Publishers, found publishers anticipated strong growth as they increase paid-for elements of their websites.
The trade body represents digital publishers in the UK, and the publishers quizzed represent at least £700m of digital revenues in the UK.
In its fifth annual Organisation Census, the AOP found that its members are expecting digital revenue growth of 15% in 2013.
On average, digital revenues already account for 34% of AOP members’ total revenues.
Within this number, digital revenues account for 50% or more for only a quarter of AOP members, with another quarter saying they represent less than 10% of their total.
Diverse revenue streams
Increased revenues will come from a variety of sources, with 88% saying they expect to increase paid-for elements of their websites.
Besides growing advertising revenues, AOP members are also looking to data, mobile and apps for more revenue, with 88% increasing investment in technology this year, up from last year’s 78%.
Mobile and apps development is the top priority area of investment for 79% of respondents, followed by responsive design on 71% and data on 68%.
When asked about their top 5 priority revenues streams, advertising, both display and creative solutions, scored 56%, and mobile and subscriptions 47%, with 41% citing data.
John Barnes, AOP chairman, said: “Technology is proving a key focus for driving revenue growth but is increasingly a major challenge. Digital media owners must deliver a consistent, top-quality user experience with full content engagement across multiple devices and platforms, where the commercial model for each individual channel does not automatically offer a return on the required investment. Improving reader revenues and revenues from assets such as data is going to help.”
Developer and analyst recruitment priority
For the fourth consecutive year, there has been an increase in the number of respondents who expect to take on staff – 62% this year against 59% last year. For the first time, developers and analysts are the two highest priority areas for recruitment, ahead of ad sales.
Digital media owners also expect to invest in their staff, with 64% saying that investing in analytics skills is a priority, followed by advertising operations at 58%, then ad sales and editorial on 52%.
App development and mobile investment fell down the list of priorities year on year, from 67% to 48% and from 61% to 48% respectively after a year of strong investment.
Tim Cain, head of research and insight at the AOP, said: “Digital media owners are still investing in editorial and ad sales, but they clearly think future growth will be driven by technology. Right now, it’s all about analytics and data, which bears out the AOP’s predictions in September after our content and trends census. I think these numbers give a good indication of the future shape and look of the digital media industry.”
Increased collaboration
Collaboration between media owners is also becoming more important as they try to avoid duplication and offset the high cost of investment. This year 85% of respondents said they would or are already collaborating on technology with other publishers, such as licensing another publisher’s platform, up from 72% last year. As one respondent said: “The industry is plagued by duplication of effort in digital platform development – very unlike the print supply chain, which is largely shared. Publishers should be talking to each other about collaboration for core functionality.”
Key findings
• Average digital revenue growth is predicted to be 15%
• 88% are increasing investment in technology (78% last year); top priorities are investing in mobile and apps 79%; responsive design on 71%; data 68%
• 85% of respondents saying they would or are already collaborating on technology with other publishers
• 62% expect to increase headcount; developers, ad sales and analysts are the key roles to be recruited
• Top three investment priorities are analytics on 64%, 58% ad ops, 52% editorial
• Top five priority revenues streams are advertising 56%, 47% mobile and subscriptions and 41% data.
Source: www.ukaop.org.uk
