Digital publishers must continue to change
An article submitted to the Asia Video Industry Report 2025
Not the usual subject matter this week. I am speaking at the AVIA OTT conference in Singapore and wanted to share the article I submitted for inclusion in their annual report.
Global advertising is expected to grow by 4.6% to reach $752.8b this year, powered by digital growth of 6.5% (Dentsu, Global Ad Sales Forecasts Dec 23). Against this backdrop, whilst the market continues its path of intense change, the drivers of change remain very familiar. Advertisers, agencies, publishers, intermediaries and regulators continue to adapt and adjust as these changes play out - and BBC Studios has embraced these changes head on.
Despite driving advertising growth, there are signs that the digital market is maturing, and that annual growth expectations are flattening (6.3% three-year annual compound growth rate 2023-26). The market naturally rewards larger publishers over smaller publishers, but as audiences fragment, what counts as a small publisher keeps expanding. Although ad-free subscription is still expanding in Asia, advertising has a bigger share of the market and we are seeing every major CTV service rushing to introduce cheaper ad-supported tiers with varying degrees of success. Furthermore, what counts as a publisher is expanding with the growth of retail media.
The first driver of change is the increased supply of inventory and new ways for advertisers to reach key audiences. In the absence of double-digit growth and the pervasive economic uncertainty, not everyone can win. Some form of market consolidation will be necessary. Successful publishers need to cut through with audiences in terms of brand resonance and quality of content. BBC Studios launched the new BBC.com website and BBC app at the beginning of 2024 as a class-leading showcase of our factual output across the world. As the world’s most trusted international news brand and Asia Pacific’s no.1 international online news brand (BBC News Brand Tracker, Kantar) we are investing to provide a premium user experience for the 411m people we reach weekly, as well as our advertisers.
The second driver of change is AI and automation. Non-generative AI has been with us for some time. Interpretation and prediction from large data sets continues to offer new opportunities for publishers to package 1st party data for advertisers. Automation based on patterns that update with machine learning can help optimize campaigns through precise targeting and efficient ad placements. Generative AI is beginning to encroach on the space occupied by creatives and may be able to drive down costs over time. BBC Studios StoryWorks leverages our reputation for bringing global stories to global audiences and our position as a premium publisher and content creator to design bespoke campaigns for clients. We can deliver integrated, cross-media campaigns that combine digital and traditional channels, such as advertising on our BBC Earth channel or sponsoring live events in Asia, to create more cohesive and impactful brand experiences.
The third driver of change is data privacy and regulation. Regulators continue their fight to protect users’ data and privacy. Google finally stopped deferring the decision on cookie deprecation, but then handed it off to users to decide individually. With customers reaching saturation point for paid subscriptions and the rise of FAST channels, there is a recognition that data-targeted advertising, when used responsibly, is a legitimate revenue stream that offsets the cost of content to the consumer. BBC Studios employs best-practice data management and retention policies to build on our reputation for trust. We want to increase engagement with users through authenticity, transparency and great content.
As we turn the page on 2024 and look forward to 2025, digital advertising is expected to continue its growth, albeit at a slower pace. Increasing inventory, technological advances and an empowered audience willing to trade anonymized data to reduce spend on content will continue to drive this growth.
Next week normal service returns and I will cover how to set objectives.