While the stellar growth of digital subscriptions continues, ad sales remains the largest source of revenue for publishers today and their biggest strategic focus for the future, according to a wide-ranging research survey of 100+ publisher executives by Digiday.
Direct-sold and programmatic ads are the brightest spots for publishers’ online revenues, the report shows. 50% of publishers reported that direct-sold advertising was a large or very large source of revenue for them. Programmatic ads are also another major source, according to 36% of publishers.
“In particular, programmatic advertising has reached unprecedented adoption in recent years as the industry responds to changing marketplace dynamics,” says Taylor Peterson, Deputy Editor at Third Door Media.
While subscriptions are more important as a piece of the pie for large publishers, for publishers that make under $50 million in revenue, subscriptions are making less money. Most small publishers make money through direct-sold ads.
Despite all the noise with the pivot to paid, subscriptions aren’t a source of revenue for 40% of publishers.Shareen Pathak, Managing Director of Editorial Products, Digiday
In a different survey of 135 publishers conducted by Digiday Research this fall, over 65% of respondents said building direct-sold ads were a major focus for them over the next six months. Other major priorities are programmatic ads: almost 60% of publishers said that was either a large focus or a very large focus area for them.
Almost 4 out of 10 publisher executives said that their company’s resource commitment to subscription initiatives is in the single-digit percentages, according to an earlier survey by Digiday. An overwhelming 75% say they spend less than a fourth of resources on subscription efforts.
Other than ads and subscriptions, excitement about other sources of revenue is comparatively muted. For example, the research indicates that brands are increasingly skeptical of branded content’s effectiveness, and revenue streams via affiliate links were nascent and small parts of the business.
“Selling ads direct can be more difficult, but publishers so far have found that it’s a bright spot when it comes to revenue,” Shareen concludes.