Jun 9, 2016

6 Key Takeaways from Mary Meeker’s 2016 Internet Trends

You know you are good at being an industry analyst when each year the world eagerly awaits your updated PowerPoint and no one seems to mind that it's somewhere in the vicinity of 200 slides!

Since the mid-2000s venture capitalist, Mary Meeker of Kleiner Perkins Caufield & Byers (KPCB) has released her annual Internet Trends update and with a track record that includes successfully betting on Google, Amazon, Spotify, and Twitter, people are inclined to take notice despite a relatively dry presentation style (note: understatement).

Last week we saw the 2016 edition of Meeker’s state of the industry and because the deck clocks in at 213 slides and we are kindly folk at bwired, we have condensed these to 6 key takeaways.

Bear in mind that Meeker’s data is focused on the US market, but this can easily be seen as a portent of what’s to come in the Australian market in the next 1-2 years in most cases.


Takeaway #1: The Internet speaks languages other than English

Internet penetration in the developed world is fairly high but there’s plenty of growth still to come among fast-developing economies.

Internet user growth in India has accelerated to 40% year on year with 277 million users, the second largest internet market behind China. 

If you are in eCommerce or have a business model that could expand to sell products or services to countries like India and China, it may be worth considering the logistics of doing so.

One consideration may be making your website accessible to languages such as Mandarin and Hindi.


Takeaway #2: Mobile advertising is finally catching up

Whilst humans are devoting increasing amounts of time to engaging with their mobile phones, advertisers have been slow to catch on.

Traditional advertising such as TV, print, and radio have typically over indexed for share of ad revenue against actual media consumption, while mobile advertising has experienced the inverse.

This is slowly changing, although there is still a wide gap with much room to grow.

Mobile advertising grew 66% year on year and given advancements in media formats and examples of stronger executions by advertisers in the medium, this will continue to accelerate at the expense of traditional media.

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If you are running paid advertising of some sort and not doing it on mobile, you are probably ignoring around 50% of your potential audience.

Consider changing this ASAP.


Takeaway #3: Did someone say that Facebook ads wouldn't fly?

It wasn’t long ago that Facebook seemed a free way to connect with customers and build some brand engagement.

We are now a couple of years past the point where you might successfully participate in Facebook without paying to play and it appears that the market agrees.

Meeker identifies 59% year on year growth in Facebook advertising (compared with +18% YoY for Google) and these two global digital giants accounted for 76% of Internet ad growth in the USA.

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Facebook has done a great job of making their ad management platform simple to use and relatively inexpensive to test out.

Most importantly you can leverage the enormous power of the global Facebook database to identify a seriously granular target market and tailor your communications to your chosen audience segments.

Worth a try if you are not doing it already.

Additional reading: 7 Tips To Create Facebook Video Ads That Drive Engagements


Takeaway #4: Innovate your ad plans or be blocked out

Digital advertisers got a well-earned scare in mid-2015 when the latest version of Apple’s software (iOS9) came standard with ad blocking functionality on its Safari browser.

This meant that overnight, billions of ad impressions would go unserved to users that were savvy enough to switch on their ad blocking facility.

Today it is perceived that “more than 1 in 5 of the world’s 1.9b smartphone users are blocking ads when browsing the web”.

This seems to be a growing trend on both desktop and mobile (although far more prevalent on mobile) with Meeker’s presentation confirming around 220 million desktop users and 420 million mobile users employing ad blocking via their browsers.

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This is a scary but fascinating trend for the ad world.

Publishers are being forced to come up with alternate means for generating revenue beyond display advertising and you won’t hear too many consumers complaining about a dystopian universe without interruption from flickering ad banners.

Similarly, advertisers are going to be forced to try alternate means of getting their message across, either via incredibly engaging ad banners that improve the artform so much that users won’t want to miss out by switching on the ad blocker or more likely, by turning to native advertising or content marketing to get the message across in more subtle ways.


Takeaway #5: eCommerce is here to stay

This one possibly feels like a confirmation that the sun will again come up tomorrow morning and set around 10 hours later in the evening (in the Australian winter anyway), but it’s good to see the evidence.

In the year 2000, online accounted for fewer than 2% of total US Retail sales and in 2015 this figure has bloomed to over 10%.

With the demise of traditional bricks and mortar retailers like Dick Smith Electronics, this trend is clearly consistent in our local market.

If you are a retailer not currently selling online and have not heard the bleeding obvious from your family, friends, or financial advisors, there may be real opportunity to help scale your business via a lower cost online channel.

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Takeaway #6: Your Snapchat curiosity is worth investigating

I know what you’re thinking.

Snapchat is a strange little viral beast of a thing mainly for teenagers to send one another inappropriate and thankfully disappearing images.

You were previously right, but in 2016 you’re mostly wrong.

That might fairly describe Snapchat circa 2014 but that view is overly dismissive of the functionality changes and subsequently far broader adoption by an older generation of users.

It’s also a really similar vibe that we were all giving off about Facebook in the mid-late 2000s and we all know how that turned out.

This is a fairly typical journey for new technology.

The early adopters embrace and make it all seem a bit scary and niche. Soon it picks up some mainstream attention after those early champions spread the cool and it’s not long before established brands and publishers (and yes, Internet celebrities of the Kardashian ilk) get on board.

Now we are seeing all of those mainstream characters using Snapchat to promote themselves in a candid, authentic and trustworthy light.

Meeker identifies that Snapchat has grown at an even faster rate than Facebook for video views totalling a baffling 10b per day in Q1 2016.

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If you are a brand that wants to make a personal connection with your audience, proceed with caution but do consider Snapchat as an option.

Authenticity has become a huge driver of video views in general (YouTube, Vimeo, Facebook, Vine included) and this may be your opportunity to step out from behind the curtain and reveal your brand's human touch.

Did I hear someone say Chewbacca lady?

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In conclusion

This is a seriously meaty presentation and for those with the time to fully get under the hood, it's well worth a full read through.

Some other highlights include discussion around the rapid rise of non-word based self-expression (emojis), growth in private messaging networks such as WhatsApp and Facebook Messenger, and voice recognition as a computer interface. 


But if you don’t get around to it you might simply pause to consider the developing world and eCommerce for your expansion plans, mobile and Facebook advertising in your digital media mix, more native alternatives to digital display banners, and Snapchat to engage a millennial crowd.

Let me know how you go with it.

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