Online publishers in the UK are shifting their focus to non-advertising sources of revenue, as a new industry study reveals that digital publishing revenue declined by 3.7% year-on-year to £113.1m in the second quarter of 2019.

This is according to the Association for Online Publishing (AOP) and Deloitte, the professional services firm, whose quarterly Digital Publishers Revenue Index is based on a survey of 21 UK digital publishers, including 15 B2C and six B2B companies.

The report found that a 15% decrease in display advertising in Q2 2019 was almost entirely responsible for the decline in digital revenue growth, although increases in online video (20%) and subscriptions (14%) partially helped to offset the overall fall in revenues.

Desktop-only revenues dropped by 58% year-on-year while revenues from smartphones and tablets fell by 12% over the same period.

However, multi-platform revenues rose by 20%, which the report said indicated that more campaigns are multi-platform than solely desktop and also reflected responses to changing consumer behaviours.

With revenues from traditional sources continuing to decline, AOP board members indicated that they intend to prioritise diversifying their revenue streams over the next 12 months, with 88% saying that non-advertising growth is a high priority focus.

Half of publishers also reported that the introduction of new products and services will be a high priority over the next 12 months.

And despite the overall decline in revenues in the second quarter, optimism among AOP board members about their own company’s financial prospects rose to 75%, a 31 percentage point increase compared to Q2 2018.

Commenting on the findings, Richard Reeves, managing director of the AOP, said: “These are challenging times for the UK publishing industry and this is certainly reflected in the latest DPRI findings.

“Publishers across the board are looking to diversify their revenue sources and move away from solely relying on advertising revenue. While industry challenges remain constant, especially given the increased scrutiny from the ICO, there is a continued need for publishers to take responsibility and find solutions to address these issues.”

Sourced from AOP, Deloitte; additional content by WARC staff