Three Solutions to Combat Declining Display Revenue
by Romany Reagan on 20th Feb 2017 in News
There is no denying that ad blocking software has caused a rift in the online ecosystem. Supporters argue that it gives them better access to content; and opponents counter by citing an implicit contract that people agree to when viewing online material. However, there is one point that is indisputable: publishers and advertisers alike have been losing display revenue, and there isn’t an end in sight. In this piece, Oliver Roup (pictured below), CEO and founder of VigLink, addresses these issues, acknowledging that, although there is no one-size-fits-all solution, publishers will need to continue to look for ways to increase their revenue in an ecosystem where display advertising dollars continue to fall.
In 2017, approximately 86.6 million people will use ad blocking programs and apps in the US. That number will continue to grow quickly, due to bulky ads, slow page loading times and, perhaps worst of all, videos that are out of view, yet audible.
Historically, people have been less concerned about installing ad blockers on their smartphones as there tends to be less advertising inventory due to small screens. In the US, only 2.2% of smartphone users are currently using ad blockers, but in Asia-Pacific, where people rely more heavily on smartphones to reach the internet, 36% of smartphone users have ad blocking browsers. If you’re thinking that 2.2% doesn’t sound too bad, think again: that number is expected to increase by 62.3% this year.
With the knowledge that usage of ad blockers is only going to continue to increase, and display revenue will continue to fall, it’s important for publishers to be equipped with solutions. Classic solutions include getting your site whitelisted, asking your readers to pay for content, or only allowing them to view content once they’ve turned off their ad blocker.
In this piece, I'm going to look at three additional monetisation strategies that publishers are employing in order to mitigate the approximate USD$21.8bn (£17.56bn) that is lost from ad blocking every year.
Publishers are increasingly turning their interest towards the affiliate revenue model. Affiliate marketing has grown tremendously beyond the previous conceptions of click-bait and spam. Publishers, such as the New York Times, who previously had no intention to integrate content-commerce into their publishing strategy have turned over a new page. For years, sites like The Wirecutter built their business around affiliate revenue from timely, relevant product recommendations (and The New York Times took notice!), showing that understanding exactly which products users want can lead to better content and higher revenue. Content monetisation platforms are now being trusted by industry leaders like MSN, Rodale, and Meredith to convert commercial links and unlinked product mentions into revenue-generating links.
Gone are the days when being prominent on your owned-and-operated entity was sufficient to be successful. Today, publishers must expand their presence across numerous platforms in order to keep audiences engaged. This requires a high degree of agility, as well as a strong analytic sense of what’s working and what’s not. By spreading targeted content across multiple platforms, publishers can take a critical look at where they are achieving the highest ROI.
YouTube star Eva Gutowski is a great example of a publisher who expanded beyond a blog with video content. Business Insider reveals that although Eva, “started making videos and embedding them into her blog posts [...] she noticed that the videos were actually getting a ton more views on YouTube than on her blog, and she switched her focus”. Eva now has 7.5 million YouTube subscribers and will be starring in her
own show that will be featured on YouTube’s subscription only Red Channel.
Sponsored posts are providing much-needed relief to publishers during a time when many are watching their ad dollars decrease steadily. Today, we’re seeing many publishers across the board get involved in sponsored content. These posts are both beneficial to publishers, who can generate what might be a completely new revenue stream, as well as advertisers, who are becoming more critical of where their ad spend is being allocated.
Publishers who have harnessed the power of sponsored content include Vice and Vox media, who are partnering with advertisers to produce video content to be promoted over Facebook, which again touches on the point above about distributing content on various platforms. Publishers are being forced to move past their owned-and-operated sites to be successful. This is creating a new chain of events where 'advertisers pay, publishers create, and Facebook promotes'.
Although there is no one size fits all solution, publishers will need to continue to look for ways to increase their revenue in an ecosystem where display advertising dollars continue to fall.