The Census acts as a temperature check of the digital publishing landscape by reflecting the level of current activities being undertaken, the expected degrees of change over the next twelve months and captures sentiment around the issues of most prominence either as an opportunity or threat.
Key Themes
Mobile might be making the headlines in this year’s Content and Trends Census but publishers believe there is a greater diversity of key trends to occupy their thinking over the next twelve months than we’ve previously seen. There’s a fairly even spread amongst five potential trends - on the mobile front, ‘Smartphone optimised sites and apps’ and the development of the ‘iPad and other tablets as a platform for digital editions and apps’, are equally acknowledged as the biggest trend by 18% of publishers, but so too is ‘Data ownership and management’.
Just behind these three are ‘Video on demand and web connected TV’ (15%) and ‘Automated trading and real time bidding on display ads’ (12%). Both of these trends have grown significantly year on year, as has the focus on data, which has seen a threefold increase from those who thought it would be a key trend a year ago. In fact now, nearly seven out of ten publishers said a long term data strategy will become the most significant priority to develop their commercial assets.
Mobile
But as past Census surveys have shown, the emphasis on the growth of mobile devices as a digital publishing opportunity continues to occupy a position of priority in publishers’ plans. In terms of opportunities, almost all publishers (90%) believe that iPad / tablets offer the most significant one over the next twelve months, whilst mobile internet generally, apps specifically, and mobile ads, all feature in the top five perceived opportunities for the coming year. Looking ahead, three quarters of publishers believe that mobile devices will become more important than traditional sites.
Publishers are continuing to adapt their sites for increasing mobile consumption by audiences and now over 60% state that the majority of sites in their portfolios are optimised for mobile compared to around 50% who would have said that a year ago. That compares to only 40% of the top 100 advertisers who have mobile optimised sites, which in itself is an inhibitor to the growth of mobile advertising as returning the consumer to a non-mobile friendly site experience has to be an ineffective use of advertising.
The top three priorities for focus on content delivery over the next twelve months are all in the mobile area – mobile internet, smartphone and tablet apps, all acknowledged by one in two publishers. However, while more people than ever are consuming content on their smartphones and tablets, ad revenues are not migrating to those devices at the same rate. According to the Census, publishers rank ad agency attitude as the greatest inhibitor to revenue growth for the mobile model (see graph). Priorities for monetisation are led by maximising the ad yield via direct sales (57%) and growing paid content / subscriptions (40%).
Nearly twice as many respondents to the Census said agency attitude rather than audience size would hold back mobile revenue growth next year, cited by 55% and 31% respectively. Dependency on low-yield ad networks would also hamper growth, according to 52%. For tablets, the two biggest inhibitors to growth will be ad agencies’ dependency on low-yield ad networks and size of audience, both on 52%.
Mobile still has a long way to go to fulfil its revenue potential. Figures from Comscore showed that in June, over 16% of the UK’s online traffic came from mobile devices (phones, tablets and consoles); that’s the highest rate of mobile traffic in Europe, and by quite some way. Ireland is next with 11.5% and Russia third with just over 10%. The Content and Trends Census has found that 87% of publishers get at least 10% of their digital traffic from mobile users, in fact a third get over 20% of their traffic from mobile. Contrast this with mobile revenues as a percentage of digital revenues where only 29% generate over 5% of their revenues from this traffic.
Lee Baker, director of AOP, says: “We are going to see some fundamental changes to the mobile ad market over the coming year as ad agency attitudes catch up with publisher investment and mobile audience size.”
These changes include:-
* Ad revenues will experience massive growth, doubling within 12 months of agencies recognising the opportunity in the mobile market.
* Publishers will stop creating content according to platform and will increasingly use technology that automatically adapts content to format to distribute it as widely as possible. One CMS will “disseminate” to all platforms, which will allow publishers to align content and pricing strategies.
* Audiences will accept that they can only receive free quality content in return for personal data. This will massively increase the potential value of data assets, an area that will see much sharper publisher focus.
Development of mobile overall is affected by device fragmentation (72%) and in-house skills and resource (56%). The business model for apps is showing pricing strategies diverging by device. Publishers are increasingly likely to follow paid app models on tablet (68%), whilst smartphone app strategies are more likely to be split going forward (39% paid, 25% free).
Other highlights – Video and Social Media
Video is now ubiquitous, with all publishers carrying video content, with the percentage of publishers seeing growth in consumption across all devices: desktop (94%), tablet (72%) and smartphone (63%). Over 80% of publishers will increase investment in video over the next twelve months and for nine out of ten publishers, it’s seen as a core editorial proposition with incremental commercial revenue benefits.
Content marketing via social media is now almost ubiquitous and likely to become more important. The key objective is increasing traffic to site (65% of publishers) followed by improving SEO link building and increasing engagement with prospects and customers. Social posts are considered the most effective form of content marketing (one in three publishers) ahead of email newsletters (31%) and video (22%), with the most commonly applied success measure (nine out of ten publishers), being improved engagement (reduced bounce rates, more time and page views on site etc).
Threats and challenges
When it comes to threats to the industry, the economy, noted by 63% of publishers, again stands as the main challenge, ahead of competitors (54%). With the long term outlook for the economy as a whole showing no signs of material improvement, it’s a safe but unwanted bet we’ll see it at the top of the agenda for the foreseeable future. One threat that is easing is that of the “cookie law”, which since the EU privacy directive has moved into law is regarded as making less impact. 35% of publishers feel it won’t have an adverse impact compared to only 20% in last year’s Census. However with tighter privacy protection for consumers the subject of impending EU legislation, now is not the time for complacency in the industry.
Quality recruitment and development of skills continue to be at the top of the challenges for the digital publishing industry, according to eight out of ten publishers. As publishers increasingly embrace technology within their businesses, the battle for talent becomes one against the digital giants outside the traditional media marketplace.
Finally, there’s still a strong view, shared by three quarters of publishers that advertising will dominate revenue generation for some time yet. There’s also a growing belief that even in an advertising led economy, paid content models will become increasingly widespread (68% of publishers) as consumers understand the value of content and the benefits of format or platform of delivery.
The Association of Online Publishers Census launched its annual survey of AOP members’ businesses in 2002; and this is the fourth year that the Census has been split into the ‘Organisation’ survey published in the Spring, and a ‘Content & Trends’ survey published in the Autumn.
AOP members include newspaper and magazine publishers, TV and radio broadcasters and pure online media, representing 1500 respected brands and publications producing original, branded, premium and quality content.
