Easiest way to use Picasso in notification (icon)

Not sure why your code is not working but its compiling fine for me, tested on API level 21 and Android Studio.

I made a few changes to fit my needs, e.g. removed the time delay.

The only noticeable differences is the below output in my logcat:

Setting airplane_mode_on has moved from android.provider.Settings.System to android.provider.Settings.Global, returning read-only value.  

which is normal based on the links: this and this

And my updated code is:

    Bitmap contactPic = null;

    final String getOnlinePic = GET_AVATAR;

    try {
        contactPic = new AsyncTask<Void, Void, Bitmap>() {
            @Override
            protected Bitmap doInBackground(Void... params) {
                try {
                    return Picasso.with(ctx).load(getOnlinePic)
                    .resize(200, 200)
                    .placeholder(R.drawable.ic_action_user_purple_light)
                    .error(R.drawable.ic_action_user_purple_light)
                    .get();
                } catch (IOException e) {
                    e.printStackTrace();
                }
                return null;
            }
        }.execute().get();
    } catch (InterruptedException e) {
        e.printStackTrace();
    } catch (ExecutionException e) {
        e.printStackTrace();
    }

    if (contactPic != null) {
        builder.setLargeIcon(contactPic);
    } else {
        builder.setLargeIcon(BitmapFactory.decodeResource(ctx.getResources(), R.drawable.ic_action_user_purple_light));
    }

I suggest a simplest way to integrate a remote picture inside your notification as large icon with Picasso.

// your notification builder
NotificationCompat.Builder notificationBuilder = new NotificationCompat.Builder(this)
                .setSmallIcon(R.mipmap.ic_launcher)
                .setContentTitle(getString(R.string.app_name))
                .setContentText(message)
                .setAutoCancel(true)
                .setSound(defaultSoundUri)
                .setContentIntent(pendingIntent);

String picture = "http://i.stack.imgur.com/CE5lz.png"; 
Bitmap bmp = Picasso.with(getApplicationContext()).load(picture).get();

notificationBuilder.setLargeIcon(bmp);

NotificationManager notificationManager = (NotificationManager) getSystemService(Context.NOTIFICATION_SERVICE);
notificationManager.notify(0, notificationBuilder.build());

I'll answer the question myself because I've found a decent way, using Picasso and RemoteViews. Tested and working with Picasso 2.5.2 :

// Default stuff; making and showing notification
final Context context = getApplicationContext();
final NotificationManager notificationManager = (NotificationManager) getSystemService(Context.NOTIFICATION_SERVICE);
final Notification notification = new NotificationCompat.Builder(context)
        .setSmallIcon(R.mipmap.ic_launcher) // Needed for the notification to work/show!!
        .setContentTitle("Title of notification")
        .setContentText("This is the description of the notification")
        // Uncomment if you want to load a big picture
        //.setStyle(new NotificationCompat.BigPictureStyle())
        .build();
final int notifId = 1337;
notificationManager.notify(notifId, notification);

// Get RemoteView and id's needed
final RemoteViews contentView = notification.contentView;
final int iconId = android.R.id.icon;

// Uncomment for BigPictureStyle, Requires API 16!
//final RemoteViews bigContentView = notification.bigContentView;
//final int bigIconId = getResources().getIdentifier("android:id/big_picture", null, null);

// Use Picasso with RemoteViews to load image into a notification
Picasso.with(getApplicationContext()).load("http://i.stack.imgur.com/CE5lz.png").into(contentView, iconId, notifId, notification);

// Uncomment for BigPictureStyle
//Picasso.with(getApplicationContext()).load("http://i.stack.imgur.com/CE5lz.png").into(bigContentView, iconId, notifId, notification);
//Picasso.with(getApplicationContext()).load("http://i.stack.imgur.com/CE5lz.png").into(bigContentView, bigIconId, notifId, notification);