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Digital Publishing Advertising Revenues up 18.0% Year on Year

Deloitte, the business advisory firm and the Association of Online Publishers (AOP) today revealed that UK publisher digital advertising revenues were up nearly one-fifth (18%) in the third quarter of 2013 compared to last year. This is the highest year-on-year growth since the second quarter of 2010. Online publishers have demonstrated high levels of confidence, with all respondents to the survey expecting to see growth in their businesses in the final quarter of 2013. The AOP Digital Publishers Revenue Index Report (DPRI), carried out by Deloitte said it has been a strong third quarter for UK digital publishers. A total of 85% of AOP respondents* reported positive total digital advertising growth in the third quarter of 2013. Newspaper publishers performed particularly well, with half having achieved growth of over 30%. John Barnes, Chairman AOP and MD Digital and Tech Incisive Media, commented: "It is a little over 18 years since the first banner ad was served and in that time digital advertising has become the most significant revenue stream for most media owners and a sophisticated and established targeting medium. “The changes in ad technology such as better targeting are giving premium publishers new opportunities and are helping to target high value consumer and B2B customers, benefiting media owners." Howard Davies, Deloitte media partner said: “These results demonstrate the growing digital strength of UK publishers and that money can be made from digital activities. Whilst there is still an element of exploration and testing, it is clear that publishers are increasingly finding sustainable business models beyond pure print.” Growth of online video For the sixth consecutive quarter, online video was the fastest growing advertising format for digital publishers, up one-third year-on-year. Online recruitment advertising grew by nearly a quarter (23.4%) compared to last year, demonstrating an increasing confidence in macro-economic conditions and further proof that digital media is becoming more dominant for advertising across all sectors. Classified advertising was the only digital category not to experience double digit growth this quarter. However its 4.2% year on year growth still represented the highest level for this category in 2013.

UK Digital Publisher Advertising Revenue Growth*
Q3 2013 vs. Q3 2012
AOP & Deloitte DPRI Report, Aug 2013
Digital advertising Format % Change
Total 18.0%
Video 33.3%
Recruitment 23.4%
Sponsorship 21.9%
Display 14.1%
Classified 4.2%
*Industry average derived from actual revenue data supplied by 27 AOP publisher members.

Tim Cain, head of research for the AOP, added: “The growth across all kinds of advertising categories suggests digital media is being adopted as the primary means of advertising for consumers and businesses and reflects the confidence in the online sector's ability to deliver results from their advertising communications.” AOP Sentiment Index The AOP DPRI, complemented by the AOP Sentiment Index Report, which questions AOP board members on how they anticipate the market to perform over the coming 12 months. All AOP board members expect to see growth in digital advertising spend this quarter (Q4 2013) with one-quarter expecting that increase to be in double digits. Organic revenue growth remains the priority for AOP members with three quarters selecting ‘Advertising revenue growth’ as the highest priority for their business over the next 12 months. Cost reduction was seen as the highest priority for only a third of publishers surveyed, down from 46% in Q2 2013. ‘The introduction of new products and services’ increased by one-quarter from 42% in the second quarter of 2013 to 67% in the third quarter of 2013. Technology advertising spend was expected to grow, potentially driven by rising competition in devices and consoles. Over one-third of publishers (38%) expected to see a rise in advertising spend by technology brands over the next 12 months, the highest of any 
 
AOP Sentiment Index Gauging Digital Publisher Confidence & Priorities over the next 12 Months*
Published in Conjunction with the Digital Publishers Revenue Index (DPRI), Aug 2013
% of AOP board members who have selected each of the following sectors to show the most growth in advertising spend over the next 12 months Q3 2013
Technology 38%
Retail 25%
Automotive 25%
FMCG 12%
*Survey of AOP Board Members. Positive Industry Outlook Confidence amongst digital publishers remains significantly higher than the average found throughout wider industry. The Deloitte CFO Quarterly Survey questions 300+ CFOs of leading companies across industry sectors to gauge market optimism. Those taking part in the AOP Sentiment Index were found to rank 37% points higher than the cross industry CFO group when asked if they felt more optimistic about their company’s finances now that they did three months ago.  About Deloitte In this press release references to Deloitte or Drivers Jonas 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/about 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. Member of Deloitte Touche Tohmatsu Limited.