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AOP reveals shift from cost cutting to revenue growth

The latest AOP Digital Publishers Revenue Index, launched to the press for the first time last Friday, shows that amongst its members digital advertising revenues grew 12 per cent in the final quarter of 2012, with classified, display and online video all performing well. Indeed optimism is also on the rise among digital media owners despite the uncertain economic environment and is demonstrated by their expectation to focus less on cost cutting and more on growing revenues, according to the quarterly AOP Sentiment Index, also released today. The Sentiment Index, which questions AOP members about how they anticipate the coming 12 months, shows that during 2013, digital media owners expect to reduce their focus on cutting costs and increase their attention on growing both advertising and non-advertising revenues. Said AOP head of research Tim Cain: “We know that the market is tough but optimism among digital media owners has been rising for the past five quarters. What’s interesting is that historically this sentiment has tended to be conservative, with actual figures showing stronger growth than the industry had predicted. We see no reason to believe that this will not be the case again.” Changing priorities
According to the Sentiment Index, 63 per cent of respondents say launching new products or entering new markets is a high priority in the coming year, a 13 per cent increase on the previous quarter. The Sentiment Index, along with the DPRI, which collates AOP members’ digital revenue figures, is produced by the AOP and business advisory firm Deloitte. It is the only index that collates real digital revenue figures on a monthly basis from the UK’s biggest media owners. According to the Sentiment Index, digital media owners are more optimistic about the financial prospects of their industry than other businesses tend to be, and it shows stronger optimism than other studies such as Deloitte’s quarterly CFO Survey, which is undertaken across a much broader range of industries. DPRI
Deloitte has been working with the AOP to produce the DPRI since Q1 2008 and has produced forward-looking research through the AOP Sentiment Index since Q4 2010. Howard Davies, Deloitte media partner, said: “AOP members have had another strong quarter. And while display and classified revenues have been relatively static throughout 2012 we’ve seen strong growth quarter-on-quarter in mobile, video and sponsorship revenues.” Key findings of the latest DPRI for Q4 2012 include:
• Overall digital advertising revenues grew by 12 per cent year on year
• Display and classified advertising experienced Q4 year on year growth, with display showing 14 per cent growth, classified 4.3 per cent
• Within that, online video revenues grew 64 per cent year on year The past five years - DPRI highlights
Over the past five years Deloitte and the AOP have been gathering and analysing AOP members’ digital revenue figures with a view to forming an accurate picture of how digital revenue is growing for some of the UK’s biggest digital media owners. Over the past five years
• Total annual digital advertising revenue has grown almost 40 per cent
• Online video has experienced the greatest growth, increasing almost 600 per cent in total, or c. 50 per cent a year
• Recruitment advertising revenue is the only area to have shrunk, decreasing by a third every year About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the Country's leading professional services firms. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk for a detailed description of the legal structure of DTTL and its member firms. The information contained in this press release is correct at the time of going to press. For more information, please visit www.deloitte.co.uk. Member of Deloitte Touche Tohmatsu Limited Ends