LONDON: UK publishers witnessed 5.6% growth in total digital revenues in 2017 compared to 2016, with the increase largely fuelled by 27% annual revenue growth in display advertising, a new study has revealed.

That is according to the latest Digital Publishers Revenue Index (DPRI), a quarterly report on UK publishing from the Association for Online Publishing (AOP) and Deloitte, the professional services firm.

The DPRI report said revenue from display advertising increased from £148.9m in 2016 to £189.2m in 2017, while total digital revenue for the year stood at £365.5m.

Based on a survey of 15 B2C publishers and five B2B publishers, the report also found that subscriptions were a significant revenue stream for digital publishers during the year, having increased by 8% to £34m.

B2B publishers, in particular, were the main beneficiaries of this trend, having seen subscription revenue rise 15% year-on-year to account for a full 45% of their annual revenue.

“The rise in subscriptions revenue is a further indication that consumers are increasingly willing to pay for online content, and digital publishers appear to have successfully adapted their business strategies in order to cater for current media consumption habits,” noted Dan Ison, lead partner for media and entertainment at Deloitte.

However, in the 12 months to December 2017, overall revenue at B2B publishers declined 6.5%, while B2C publishers recorded positive revenue growth of 8.1%.

Meanwhile, looking at the data on a quarterly basis (Q4 2017 versus Q4 2016), the report found total revenues rose 9.5%, including an impressive 35% increase from display advertising.

Over the same quarter, however, revenue from online video declined 21% while revenue from sponsorship fell 16%.

Commenting on the findings, Richard Reeves, managing director of AOP, said: “Reviewing the changes in publisher revenue during 2017 shows some interesting trends.

“Digital revenue overall continues to increase, still driven by display advertising, but there is an ever-changing focus on alternative methods to generate income such as subscriptions.”

Sourced from AOP, Deloitte; additional content by WARC staff