Digital publishing is delivering returns, with leading digital publishers predicting that by 2012 digital activities will contribute up to 40 per cent of revenues. This is according to a report launched today by Deloitte, the business advisory firm, and the UK Association of Online Publishers (AOP) in a survey of UK publishers.
Mark Lee-Amies, media partner at Deloitte, comments: “Publishers no longer see the digital world as a threat to traditional print publishing, and believe that it can complement rather than threaten print products. Digital revenue generation is averaging 17 per cent of overall revenues, and most publishers agree that the growth of online advertising spending has boosted these overall, and has not cannibalised existing print revenues.”
Other key findings of the report include:
- Seventy per cent of participants in the survey did not perceive blogs or user-generated content as a threat, with many looking at ways to integrate blogs into their consumer offerings. This content will be an important component to building communities, with the potential to be used as a source of closer customer contact and as a marketing tool
- When it comes to management, the digital director role is becoming increasingly powerful. In many organisations, this individual has a strong voice at the board if not a direct seat at the table. The digital director is no longer subservient to the editor or marketing director of the printed product
- The most coherent and fully developed digital strategies were in the business publishing sector. Revenue models of business publishers focus on subscriptions, but with advertising playing an important role. Many digital publishers were impressed and surprised by how much easier it is to retain subscribers for their print and online products ordered through the web
- Overall, print is still regarded as an efficient and valued means of consumption. Magazine, book and newspaper lovers may always prefer the feel and portability of paper, even if they supplement some of their consumption online or have chosen or bought the book online
- In contrast with business publishing, consumer-focused newspapers and magazine markets are more complex with less focused digital offerings. Newspapers and consumer magazines’ primary digital strategy is to build audiences to drive advertising revenue, based on brand strength, with only a few seeking to monetise content. These businesses are currently benefiting from a buoyant advertising market, and have found double digit growth for online advertising
One of the main challenges that came through in the survey was the difficulty in ensuring an integrated digital strategy for all stakeholders across the business. From an editorial perspective, the answer is a single editorial team on a title or brand which publishes content to the various platforms used – mainly print, web and mobile, with different types of content according to the media channel. In contrast, the advertising sales team of successful publishers are usually platform-specific and separate.
Participants in the survey were also asked to name the organisations they most admired in the digital space. Three digital businesses were seen as having played a key role in forging the digital publishing world: BBC (23 per cent), Guardian (12 per cent), and Amazon (10 per cent). Key qualities for a successful digital business were seen as: content (19 per cent), understanding of customers (16 per cent), followed by infrastructure and flexibility (14 per cent).
AOP director Alexandra White, comments: "This research from Deloitte has been well received by AOP members and demonstrates the scale of change, both in terms of product offering but also in terms of business culture, through which publishers are responding to the arrival of the digital age. These qualitative interviews, many of which were conducted with AOP members, serve to complement our own research into changing media habits and audience attitudes towards quality content delivered over multiple platforms."
Based on the findings of this survey, Deloitte extracted 5 key principles which it believes will drive future success for digital publishers:
1. Make it simple
Develop and clearly articulate a simple overarching strategy that sets out how your offline, online and mobile offerings interplay. Ensure it delivers incremental value to customers;
2. Know your customer
Get to know your customers and grow with them. Don’t ignore the young – they are your future;
3. Profit from personalisation
Personalise to provide what customers want at the right price and they will come. Don’t be afraid of breaking your traditional one-to-many publishing model;
4. If you can’t beat them, join them
Embrace those who won’t opine about or contribute to your product; they will ultimately enhance and support your brand;
5. Fee or free
Look beyond the printed word and focus on the brand at the centerpiece for generating revenue."
Join the AOP group on LinkedIn
- open for all Members
to join Subscribe
to AOP's e-newsletter.