$20-Billion In Revenue Is Up For Grabs For Publishers In The Next 5 Years

January 19, 2017

It’s now 2017 and the conversation around monetization in publishing remains much the same. With programmatic growing, but not necessarily overall campaign yields, publisher executives, tech vendors, agencies, analysts and pundits alike are still touting ‘native advertising’, and its many synonyms, as the answer to revenue growth for publishers. While there is a hint of truth to this, the answer is much broader and not quite as obvious.

The long-term answer is premium branded content – content-based advertising programs executed directly between advertisers (including their agencies) and premium publishers.

Branded content is an untapped growth area for publishers, but there is confusion around exactly what it entails. Sophisticated publishers are now presenting advertisers with multiple premium branded content executions that may not seem so obvious at first glance to all.

There are several avenues by which publishers can tap into this hidden revenue potential, from sponsorship of existing editorial content, to custom created experiences, to advertisers promoting their content marketing assets using a publisher’s premium distribution.

But just how big is this branded content industry anyway? And more importantly, how fast is it growing?

Global Ad Market Growth Continues

The overall global ad market is healthy and continues to grow, thanks to digital and mobile. Here is some key overall advertising market data:

  • The global ad market will grow from $550 billion (2016) to $775 billion (2021), at an average annual rate of 7%.
  • Digital was 35% of the ad market in 2016, and will grow from $194 billion in 2016 to $372 billion by 2021, 48% of the market.
  • Mobile was 55% of digital in 2016, and will grow to be 78% of digital by 2021 representing $290 billion.

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Display Remains Challenged, Marketers Shift to Content

Morgan Stanley published last year that Google and Facebook are capturing 103% of the growth in digital ad spend – meaning most of the market is actually in decline. Publishers rely on a display advertising model that is challenged left-right-and-center with threats from programmatic yield declines, fraud concerns, viewability based pricing, and ad blocking. It’s little wonder that advertisers are open to new solutions to address their brand marketing and awareness objectives.

Desktop ad spending peaked in 2013 and continues to decline (WSJ).

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PQ Media forecasts that the overall content marketing industry will grow to $313 billion by 2019 from $145 billion in 2015. This includes marketer spend in several areas of content marketing, including creation, technology, data and media. A rising tide lifts all ships and the tide is quickly rising for content marketing (over $1 billion has been invested in content marketing startups by VCs from 2010-2015).

Here is a Google Trends report on the interest in Content Marketing (red) and Display Advertising (blue) as a topic over the past 5 years.

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Premium Branded Content will be a $20 Billion Market by 2021

As the largest branded content technology provider to premium publishers globally (such as AOL, News Corp, Conde Nast and the Telegraph), Polar is a trusted partner and has unique perspectives on how this market segment is growing.

We have built a bottom-up-analysis of the Top 100 publishers focused on premium branded content in digital, and have made assumptions for the Top 5,000 publishers globally to arrive at our market size forecasts:

  • The Top 5,000 publishers globally will generate $6 billion in digital revenue from premium branded content in 2017.
  • The market is growing at 35% and will reach $20 billion by 2021.
  • Top 100 publishers globally make up 50% of the market, they will generate $3 billion in 2017 and $10 billion by 2021.

Based on these estimates, the average publisher in the Top 100 will grow from $30 million in premium branded content digital revenue in 2016 to $100 million by 2021. These estimates include all types of premium branded content, including editorial sponsorships, custom content and partner content programs.

Our top-down analysis leveraging eMarketer, Google and Facebook data helped us arrive at the same market size estimates:

  • 51% of the $224 billion in digital in 2017 will go to Google and Facebook, with the top 5,000 publishers getting 35% of the rest, making up $38 billion – 16% of which will be premium branded content ($6 billion).
  • 60% of the $372 billion in digital in 2021 may go to Google and Facebook, with the top 5,000 publishers generating $52 billion, 39% of which will be premium branded content ($20 billion).

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Premium Branded Content Is The Growth Engine For Premium Publishers For The Rest Of This Decade

And there you have it, there is a bright spot for publishers who make the bold move today to invest in scaling their premium branded content business to capitalize on this growth. Marketers are happy as they can achieve scale while retaining messaging and brand integration. Premium publishers have $20-billion in potential revenue in front of them, as long as they invest in the backbone of a premium branded content program today.

Benchmarks Q1-2017

April 2017 | 11-Page Report

The first three months of 2017 have shown major growth in mobile branded content performance – see the aggregate data and trends that prove it.

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