Where will UK publishers see their ad revenue coming from in 2016?

It’s no secret that legacy publishers are looking to supplement their falling print advertising revenue with its digital counterpart. It is, in fact, often the keystone of their plans for the future. It’s a plan born of necessity, one that takes for granted the idea that the proportion of adspend on digital will eventually match audience consumption habits. 

As the latest figures from the Advertising Authority and Warc demonstrate, 2014 saw the amount of ad spending in the UK going online continue to grow. Internet spending (though it’s not broken down by display ad, digital video pre-roll, interstitials etc) now dwarfs even that of its nearest competitor television, and validates predictions that 2015 could see the UK become the first country in the world where half of all ad spend is on digital.

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But how are the legacy publishers faring? What proportion of the adspend going on national and regional newsbrands and magazine brands is solely to their digital efforts as opposed to their print endeavours?

Unfortunately for those publishers who are pinning their hopes on having digital ad spend compensate for shrinking print revenue, digital ad spend was a relatively small proportion of the total ad spend across the industry.

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But all’s not lost for those publishers – at least when you look at the respective growth of print vs. digital advertising. While adspend on those newsbrand’s print products has fallen the digital equivalent has risen by, in the case of the news publishers, double digits.

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And that trend is set to continue until 2016, according to the forecasts from the Avertising Authority and Warc. 

But before publishers start celebrating, it’s worth bearing two things in mind. One is that a percentage change of 4 percent is much more significant for the larger figures of print ad spend than it is for the relatively tiny digital adspend. As we saw recently with DMGT’s results, even huge digital ad growth isn’t enough to mitigate an overall fall in ad revenue if print ad revenue falls even a few points.

Secondly, the AA and Warc foresee a slowdown of that growth in 2016 – although that could be the natural result of the total amount increasing.

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However, as is also indicated by the figures, the falling print ad spending is likely to slow as well. It’s a small ray of good fortune for publishers, although not much of one since the total ad spend is likely to decrease.

Meanwhile, the proportion of internet ad spend going to specifically mobile devices looks set to increase dramatically over the coming years. After a slow start, mobile advertising is now gaining momentum, and is set to grow still further in the coming years.

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Desktop, too, is growing, just not as fast. The figures from the AA/Warc speak to a publishing environment for the foreseeable future that is particularly hazardous for legacy publishers – one that doesn’t support their new business models to the extent they’d like, while still sapping the life out of their old revenue generating methods.

By |2015-07-29T15:00:00+00:00July 29th, 2015|Analysis|Comments Off on Where will UK publishers see their ad revenue coming from in 2016?

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