next-upnext upauthorJanko RoettgersNoneDo you know what's coming next up in the world of tech and entertainment? Get Janko Roettgers' newsletter every Thursday.9147dfd6b1
×

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy

Power

US internet advertising is forecast to contract more than 3% this year

Video advertising will be flat, while subscription video will see massive growth, predicts PwC.

US internet advertising is forecast to contract more than 3% this year

Ad spending has become a bit of a wild card ever since the beginning of the pandemic.

Chart: Janko Roettgers and Datawrapper

The total amount of internet advertising revenue in the U.S. is expected to decline by 3.4% year-over-year in 2020, PwC is predicting in the latest edition of its Global Entertainment & Media Outlook. That's a massive decline when compared to last year, which saw ad dollars in the U.S. grow by nearly 16% year-over-year.

PwC is expecting the online ad market to return to growth in 2021, and ultimately arrive at a compound annual growth rate of 4% for the five years spanning from 2019 to 2024. The U.S. ad market will be hit harder than overseas markets, with PwC predicting that global 2020 online ad spending will be down around 2.5% year-over-year.

Ad spending has become a bit of a wild card ever since the beginning of the pandemic, with industries like hospitality, travel and theaters hit hard, while online shopping has done comparably well. As a result, many companies withdrew their guidance for this year. PwC Principal CJ Bangah told Protocol that the company usually releases its annual Entertainment & Media Outlook report in June, but that it decided to delay the publication this year to better account for the impact of the crisis.

"Advertising is extremely susceptible to the economic performance," Bangah said. "It also recovers very quickly."

As in previous years, PwC is predicting the move from desktop to mobile advertising to continue. And while mobile hasn't been immune to the decline of ad spending, video advertising actually seems to be the least affected, effectively staying flat year-over-year in 2020.

However, our collective pandemic binging didn't help ad-supported video services nearly as much as it did for the Netflixes of this world, with online video subscription revenue expected to grow 30% in the U.S. this year. Video subscription services' revenue will continue to increase with a compound annual growth rate of 12.65% until 2024, while video advertising revenue will only see a growth rate of 6%, according to PwC.

Bangah attributed some of that to changing consumer expectations, with especially younger viewers preferring ad-free environments over those with high ad loads. "They want fewer ads," she said.

Ultimately, the current environment requires tech and entertainment executives to remain vigilant and flexible, Bangah argued. "Consumer habits can take a lifetime to form," she said. In a crisis like this one, consumers may ditch them overnight.

Martin Cooper with his original DynaTAC cell phone.

Photo: Ted Soqui/Getty Images

Martin Cooper helped invent one of the most consequential and successful products in history: the cell phone. And almost five decades after he made the first public cell phone call, on a 2-pound brick of a device called the DynaTAC, he's written a book about his career called "Cutting the Cord: The Cell Phone has Transformed Humanity." In it he tells the story of the cell phone's invention, and looks at how it has changed the world and will continue to do so.

Cooper came on the Source Code Podcast to talk about his time at Motorola, the process of designing the first-ever cell phone, whether today's tech giants are monopolies, and why he's bullish on the future of AI.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Election 2020

Google says it’s fighting election lies, but its ads fund them

A new report finds that more than 1,600 brands, from Disney to Procter & Gamble, have advertisements running on sites that push pro-Trump conspiracy theories. The majority of those ads are served by Google.

Google is the most dominant player in programmatic advertising, but it has a spotty record enforcing rules for publishers.

Photo: Alex Tai/Getty Images

Shortly after November's presidential election, a story appeared on the website of far-right personality Charlie Kirk, claiming that 10,000 dead people had returned mail-in ballots in Michigan. But after publishing, a correction appeared at the top of the story, completely debunking the misleading headline, which remains, months later, unchanged.

"We are not aware of a single confirmed case showing that a ballot was actually cast on behalf of a deceased individual," the correction, which quoted Michigan election officials, read.

Keep Reading Show less
Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
People

How a startup fixed the future of TV

Reelgood doesn't make shows, and it doesn't make TVs. What it does is try to make sense of the future of TV and movies — and it's doing that really well.

Before the pandemic, Reelgood's offices were bustling (and messy).

Photo: Christie Hemm Klok

David Sanderson's journey to fix the future of TV started with a simple and extremely familiar problem: He canceled cable and suddenly couldn't find anything to watch. This was 2013, and the Canada-born Sanderson had moved to Silicon Valley to work at Facebook's headquarters after a year and a half in its Dublin offices. After one look at the price of cable TV, he decided against it, thinking, "I don't really watch TV anyway." Netflix was enough.

In his day job, Sanderson, tall and confident and relentlessly cheerful, was a rising star. He "fell into product management," he said, but had a knack for it. He was on the ad-product team, working on the tool that made Facebook a self-serve ad platform (and helped turn Facebook into the ad giant it is today). When that did so well, his bosses told him to write his own job description going forward.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Power

Sonos CEO Patrick Spence: There’s money in ad sales for us

The smart speaker maker adds in-house ad sales as radio service continues to grow.

"Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," Patrick Spence says.

Photo: Andrej Sokolow/Picture Alliance via Getty Images

Sonos is doubling down on its efforts to monetize services on its platform, and is now looking to build out an in-house ad sales team for its free Sonos Radio service. Sonos CEO Patrick Spence confirmed the news in a conversation with Protocol on Wednesday, saying that in-house ad sales could help the company attract the right kind of brand advertisers to its platform. "Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," he said.

Spence made these remarks ahead of the release of the company's fiscal Q4 2020 earnings results. The company grew its revenue 16% year-over-year, to the tune of $339.8 million for the quarter. Earnings per share came in at $0.15, ahead of the $0.02 that analysts had expected. The company added 1.8 million new households to its customer base in its fiscal 2020, and close to 11 million households now own Sonos products, with an average of 2.9 Sonos products in each of those households.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Power

Pluto TV CPO Shampa Banerjee explains why free video is booming

Video services have to get over their U.S.-centric thinking to succeed internationally, Banerjee says.

"We're always very U.S.-centric. We think everyone is like us, with 500 devices. It's not [like that]," said Pluto TV CPO Shampa Banerjee.

Image: Pluto

ViacomCBS is on track to make $2.5 billion with digital video this year, and a growing part of that revenue stream is Pluto TV, the ad-supported video service the company acquired in early 2019. Pluto ended Q3 with close to 36 million monthly users and video ad dollars more than doubling year-over-year. "It's an amazing asset, and it's growing even faster than we had hoped," said ViacomCBS CEO Bob Bakish during the company's Q3 earnings call earlier this month.

A key part of Pluto's success has been its product design, which mimics the look and feel of cable TV, complete with linear channels and a traditional programming guide. To learn more about what makes Pluto tick, and what the service has in store for 2021, we recently caught up with Pluto TV CPO Shampa Banerjee.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Latest Stories