What does digital publishing look like in 2024?

For the last three years, we’ve asked publishers and solutions providers to share their priorities and outlook for the year ahead. In that time, we’ve gone from post-pandemic recovery to the cost-of-living crisis, and now, generative AI has burst onto the scene.

In a business sector that is so directly impacted by the increasing speed of development of media and AI technology, as well as by the market and regulatory response, it’s reassuring to see publishers believe they are well positioned to manage future challenges and opportunities. Despite unpredictable times, respondents ranked their confidence and preparedness at 7.1 out of 10, an encouraging outlook as we settle into 2024 and consider the road that lies ahead.

Where will growth come from in 2024?

The AOP’s quarterly Digital Publishers Revenue Index has shown consistent growth in subscription revenues, so it’s no surprise that subscriptions is the area where publishers see the most potential growth in the next three years, as was the case in the prior two surveys.

Drilling deeper, B2B publishers place the same top four expectations on events, lead generation, subscriptions, and sponsorship as they did last year. However, for B2C publishers, subscriptions are joined by audio, podcasts and internet radio, as well as ecommerce in their top three expected revenue generators, with Connected TV (CTV) following closely. This is a notable shift from last year, when sponsorship and display advertising followed subscriptions as their top three predicted revenue generators.

Focusing specifically on advertising revenues, we asked publishers where they are currently seeing the most revenue generated, whether direct deals, private marketplaces, or open marketplaces. Direct deals took the largest share by a landslide, accounting for 78% of revenues, with private and open marketplaces splitting the remainder at 11% each. Note that this split is not necessarily representative of the entire digital publishing industry, as our respondents skew towards established, “premium” publications that have the clout to secure direct deals.

When asked where publishers expect advertising revenues to be generated in three years, direct deals kept the pole position, but the split between private and open marketplaces widened to 18% and 5% respectively. This is a meteoric drop in expectations; last year, publishers thought open marketplaces would deliver 14% of future revenues – a figure that has already fallen short of expectation.

Publishers priming for cookieless future through data collection and activation

After years of uncertainty, Google has confirmed the removal of third-party cookies from Chrome. Many see this as an opportunity for publishers to take back control of the supply chain by leveraging their exclusive data, which is reflected in the survey results.

Building better first-party data funnels and gaining a 360-degree view of audiences are the top two priorities for cookie deprecation preparation, with 64% of publishers ranking these at 4 or 5, where 5 represents the prime focus. Improving zero-party data funnels, meanwhile, came in at third with 59% ranking it at 4 or 5. Publishers were least focused on testing Google’s Privacy Sandbox, or its alternatives.

Phil Raby, chief revenue officer at mediarithmics – which sponsored the survey – said: “Publishers need to know how to maximise the value of their first-party data for advertisers. Media owners should work back from a clear end stage to build a ‘Crawl, Walk, Run,’ process where they identify the key initiatives needed to get to full data maturity. This might include maximising consent, advanced audience segmentation, reporting and insights, data collaboration, and data science. One thing is clear though: this year, publishers will need to be comfortable with change and innovation to drive revenue growth from advertising.”

Of course, leveraging data to innovate products and increase revenues is easier said than done, and publishers face a range of challenges in future-proofing their advertising revenues. Providing insightful measurement and reporting for advertisers is cited as the greatest challenge for respondents, with 58% ranking this at 4 or 5 out of 5 in difficulty. Gaining user consent and querying audience data to create granular segments for targeting are jointly the second greatest challenges, both scoring 52% in 4 or 5 for difficulty.

Product innovation leads in business priorities, while talent shortage exacerbates skills gap

Publishers and solutions providers were asked to score their business priorities out of 5. While there are some interesting discrepancies between publisher and vendor perspectives (publishers scored preparation for cookie deprecation at 3, while solutions providers scored it at 4.4), all parties are broadly aligned in most areas.

At the top of the list, by some margin, is developing revenue streams through new product innovation. Next are data privacy compliance and transparency (marginally higher for B2C than B2B publishers); recruiting and retaining talent; and ensuring a diverse and inclusive workplace – all of which ranked equally.

This was the same spread of priorities as last year’s survey, with the only difference being that product innovation has taken first place. Publishers gave generative AI policies – a newcomer to the survey – a priority score of 3.5, putting it in the middle of the pack. Reviewing trading platforms came in last with a score of 2.9, though solutions vendors scored it much higher at 3.7.

Looking at staff, almost half (46%) of respondents reported a shortfall in talent within their organisation. Skill gaps were noted across all departments, though sales is where they are most acute. Supporting and retaining current employees was ranked as the first talent management priority, with appealing to new talent coming in second, and supporting underrepresented individuals entering the industry was third. Appealing to those who might return to the industry after a period of absence came last, with just 3% choosing it as their top priority.

Uncertainty around generative AI keeps it a mid-level priority, though concerns mount for the future

AI has been driving the development of media tech to support the business of digital publishing for many years, mostly operating without controversy in backend machine learning applications. But with the advent of generative AI tools in the public domain and its contentious relationship with publisher IP and content creation, we wanted to understand how publishers viewed its likely impact.

When asked how generative AI impacts the business of publishing quality content online, where 0 represents a negative impact and 10 represents a positive impact, our publisher responses scored an average 5.5 – suggesting either they see positive and negative benefits in balance, or that they are not yet sure of the repercussions. Media tech respondents scored this at 6 out of 10, suggesting a marginally more positive but still middling attitude.

Faced with this degree of uncertainty, what are publishers doing to prepare for the inevitable growth in generative AI? Three-quarters (76%) of publishers surveyed are exploring ways to use generative AI to deliver efficiencies within their business, and 70% stated their product team is exploring innovative uses for generative AI, suggesting a positive approach to harnessing the potential benefits. However, only around half (55%) of respondents said their editorial team are receiving training and defining policies for the use of the tool, and only a quarter (26%) already have an editorial policy that prohibits its use.

When invited to suggest issues that the AOP should explore on behalf of its members, the range of responses suggest a strong degree of concern about the impact of generative AI on the creation of and investment in quality content. The majority of comments received relate to protecting content IP, the role generative AI might take in the newsroom or editorial department, and how publisher-created content could compete for visibility with AI-generated content in organic search.

Progress towards ESG goals reveals some steps forward, some steps back

The past few years have seen a welcome prioritisation of environmental, social, and corporate governance (ESG) within digital publishing, as the industry reckons with its carbon footprint and stubborn barriers to diversity. Achieving ESG goals is a matter of momentum; take the foot off the pedal and it’s all too easy to slip back into a stagnant status quo. So, what did the survey reveal about the direction the industry is moving?

Responses show some steps forward and some back. Internal pressure remains a driving force, with 70% agreeing or strongly agreeing that ESG is important to their employees, a modest uptick from last year’s 67%. External pressure is also consistent or rising: 58% agreed or strongly agreed that advertisers expect progress towards ESG, matching last year, while those reporting the same expectation from investors rose from 46% to 51%.

However, the proportion of publishers that agreed ESG is central to their values dipped slightly from 67% last year to 62% today. Those focused on reducing the carbon footprint of their organisations fell from 75% to 67%, though a focus on website carbon reduction increased from 44% to 47% - which we can expect will continue to rise with the increasing availability and capability of carbon measurement tools for digital infrastructure.

Zooming in on diversity, equity, and inclusion (DE&I), two-thirds (66%) of respondents agreed or strongly agreed they have a clear strategy in place, matching last year’s results. To add more detail in this area, this year’s survey included further questions on DE&I progress, which found that 26% feel they have an effective DE&I strategy and 48% feel they have made good progress, while acknowledging there are still areas for improvement. Only 10% lack a clear DE&I strategy.

Overall, mixed progress on ESG then. Perhaps not a cause to ring the alarm bells quite yet, but it’s worrying nonetheless that the direction of travel is not entirely positive. To reverse this and prevent a trend towards ESG inertia, publishers must keep up efforts to educate and support one another in working towards a sustainable and equitable industry.

Taken as a whole, it’s hard not to be impressed by the digital publishing industry. The high average confidence reported by our respondents is well-earned; across every challenge, most publishers are either proactive in their preparation or openly acknowledge where more work must be done. While we can’t predict the impact generative AI will have in the coming year, we at least know the industry retains its spirit to confront challenges head on and adapt to new opportunities.