• by Sean Hargrave , Staff Writer, September 14, 2015

It is the question every online publisher has asked themselves endlessly -- can display advertising alone pay for quality news sites? Those who are hoping it can got a boost this morning with the editor of the International Business Times telling the Press Gazette that is does. Although he would not be drawn on the level of profit the site makes, he categorically claims that with around 20 million uniques per month, there is sufficient traffic for display to pay the wages and keep the lights on.

This may well be the case for the IBT, but I'm not so sure it's a rule that holds for news sites in general. People are always amazed when I point out that The Guardian -- the site most people associate with free online content -- always struggled to turn a profit despite having tens of millions of unique users per month. The latest figures suggest this has now topped 100m monthly uniques, so we'll have to see whether that makes a difference. The Mail Online is doing fine for profits, but then again, it does have in excess of 200m monthly uniques.

So it's a numbers game, and if you hit the tens of millions per month, then there's a chance of a profit.

My big question, however, is not limited to the here and now, but rather, what happens in a mobile environment. MAD London regular readers will know that I suspect display will struggle to make as much of a contribution to publishers' coffers as it has done on desktop for the very simple reason that the screen is smaller. There are fewer slots to fill, and those that are available look tiny and are lacking in impact, compared to display on the desktop.

I used to write about classified advertising, and the big question on the cars, properties and jobs pages perfectly reflect what online publishers are going through elsewhere. The move from print to desktop was widely joked about as seeing publishers shifting from dollars to dimes, and then the switch to mobile regarded as going from dimes to nickels. The only answer appeared to be to up the numbers game as well as supply dedicated data-driven services to industry from the resulting traffic. Auto Trader, for example, powers services through which garages can find out what's going on in the market, while several jobs sites do the same for recruiters. The trouble for news groups is that the trusted industry source in these verticals tends to be a specialist rather than a section from a general newspaper. 

So I'm struggling to see why the IBT can be so upbeat about display. Obviously, I've not seen their figures, and they're not releasing them, but if they are turning a profit now, I would respectfully point out that things are going to get tougher in a mobile-first landscape -- particularly now that ad blocking is not only growing but soon to be available on Apple devices as well as Android. 

That leaves general news sites to follow the lead of the Guardian and set up dedicated native advertising teams producing top-quality sponsored content as well as considering what other options there are, such as live events, membership and shopping clubs and value-added data services.

To my mind, display revenues are going to fall through the floor on mobile. Many newspaper groups are expecting this year to hit a balance between traditional and desktop revenue, and so you can expect to see headlines about digital making up for print's losses. These stories, though, will rarely mention that the level that revenue has balanced out at will be way lower than in the heyday of print. They are also unlikely to then speculate about the future of display revenues in a mobile landscape. 

If some publishers are still thinking that display will pay for online publishing, they would do well to forecast what will happen when the vast majority of their traffic is served on a device ill-suited to display -- and to add insult to injury, is also easily set up to block ads. Then they should ask the same question again. I'd be very surprised if many answer "yes" on both occasions.