PwC Forecasts Dramatic Desktop Search Declines As Mobile Cannibalizes Revenue

Paid-search campaigns running on desktop and laptops are estimated to decline 3.7% to $14.7 billion by 2021, but the combined share of total Internet advertising held by wired and mobile search will be much higher -- at more than 50% of the total revenue, according to data released Wednesday.

PwC's 18th annual Global Entertainment and Media Outlook 2017-2021 details the free fall of paid search delivered through fixed-line broadband and the rise of paid search on mobile devices.

Paid-search advertising for desktop fell 34.4% to take 24.5%, or $17.8 billion, of total U.S. Internet advertising revenue in 2016.

Google dominates in most global markets, but in the U.S. the company faces more competition, notably from Microsoft’s Bing, according to the report. The integration of artificial intelligence (AI) to better anticipate users’ search will become another area of focus in the next five years and make players like Apple more sophisticated in search.

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While services like Google Now, Microsoft’s Cortana and Apple’s Siri are steps toward an autonomous yet connected advertising landscape, virtual assists like Amazon’s Alexa will take voice search into the home through these mobile devices.

For mobile users, voice will become the tool to direct purchases, potentially cutting out traditional paid-search results from the process. With every technology that becomes obsolete, another takes its place.

During the next five years PWC forecasts revenue from paid search, especially from mobile, to continue to grow in the U.S.

PWC's five-year outlook also analyzes global consumer spending and advertising revenues directly related to entertainment and media (E&M) content. 

--  Business-to-Business revenue is expected to grow from nearly $89 billion in 2016 to $103 billion in 2021 (3.1% CAGR)

--  Internet Access revenue is expected to rise from $140 billion in 2016 to nearly $190 billion in 2021 (6.2% CAGR)

--  Newspaper revenue is expected to decline from nearly $30 billion in 2016 to nearly $24 billion in 2021 (-4.1% CAGR)

--  Out-of-Home advertising revenue is expected to rise from $9 billion in 2016 to $11 billion by 2021 (3.7% CAGR)

--  Radio revenue is expected to rise from $22 billion in 2016 to $24 billion in 2021(1.9% CAGR)

--  Traditional TV and Home Video revenue is expected to contract from $109 billion in 2016 to $105 billion in 2021 (-0.7% CAGR)

--  TV Advertising revenue is expected to grow from nearly $71 billion in 2016 to $75 billion in 2021 (1.3% CAGR)

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