No technology firm with at least part of its revenues coming from advertising’s financial results are complete without a warning about economic ‘headwinds’ at the moment.
The latest example is advertising giant WPP, fresh from announcing a partnership with Spotify, but enduring wobbly times in the US.
On Friday (4 August) WPP downgraded its full-year growth forecasts, warning that advertising spending by big US tech firms had fallen in the second quarter, with its revenues in that market following suit.
“What happened in the second quarter took us a little bit by surprise, I’d say, as the quarter went on,” said CEO Mark Read according to Reuters.
He added that “spend will pick up after a period of time, but I think we are nervous for the rest of the year because we can’t get total clarity on when that’s going to happen”.
The concern for the music industry is that this trend will affect the revenues of the ad-supported elements of services like Spotify and YouTube, and thus have a knock-on effect for rightsholders.
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