technology macro trends - what marketers need to know in 2014

What Marketers Need to Know in 2014

TECHNOLOGY MACRO TRENDS

In the last four years, we’ve seen tremendous upheavals in social channels, mobile adoption across the globe, and software that’s changed the way we live and work. Technology has reshaped marketing.

To adapt to this new world, marketers need to first understand it. Here are some of the key technology macro trends that have redefined our industry.

Global

Global internet users reached 2.6B in 2013 but growth has slowed to 9% from 11% in 2012.

United Nations / International Telecommunications Union, US Census Bureau, Euromonitor International.

About 40% of the global population now has some level of Internet connection, with most of that coming from developed nations. The opportunity ahead is going to be in emerging markets.

WHY IT MATTERS

China boasts 550M internet users, with 80% of those connected on mobile.

China Internet Network Information Center

Marketers and technologists are scrambling to figure out Chinese social media and internet usage as it’s grown rapidly and now represents the largest smartphone user base for any individual nation.

WHY IT MATTERS

From Jan-13 to Mar-14, US ownership of the 10 globally most trafficked Internet properties fell 33%

comScore: 1/13 and 3/14

While the US still controls #1-4 Google, Microsoft, Facebook, Yahoo, and Wikipedia, China now owns #6-9: Alibaba, Baidu, Tencent, Sohu, up from just one site in 2013 (Tencent ). The growth of China continues.

WHY IT MATTERS

Storage costs fell 99.8% and bandwidth costs dropped 98.4% from 1999-2014

John Hagel, Deloitte,

The infrastructure of the internet is in computing costs, bandwidth and storage. It’s difficult to appreciate how much cheaper it is to send and store data. What changes when bandwidth and storage are effectively zero?

WHY IT MATTERS

Venture financing in both number and dollar amount is over 50% below the 2000 peak.

Thomson ONE. Funding per Financing ($MM) calculated as total venture financing per year divided by number of deals.

With high profile IPO’s and enormous valuations, it’s reasonable to wonder if we’re actually in another bubble. The aggregate funding for startups in 2000 was $101B vs $24B in 2013, which shows we’re actually far from the first dot-com boom.

WHY IT MATTERS

Mobile

70% of mobile phone users do NOT have a smartphone.

Mary Meeker & KPCB Internet Trends 2014

While a staggering 1.1B smartphones were shipped in 2013, many were replacements. Only 1.6B of the 5.2B mobile phone users have smartphones.

WHY IT MATTERS

Tablets are shipping twice as many units as Desktop PC’s globally.

Morgan Stanley Research

Tablets are a young technology but gaining adoption at a fast clip, with 80M units shipped in Q4 of 2013 alone.

WHY IT MATTERS

Tablet users represent 28% of smartphone users and only 8% of TV users globally.

KPCB estimates based on Morgan Stanley Research and ITU data

The accelerated adoption of tablets still has plenty of room to grow: lots of people still haven’t acquired even their first tablet yet.

WHY IT MATTERS

In Asia and Africa, mobile usage is already 37% of total web usage.

StatCounter, 5/14

Compared to North American and Europe (19% and 16% respectively) Asia and Africa are truly mobile-first continents, where a significant portion of Internet traffic going through smartphones.

WHY IT MATTERS

Mobile is the most consumed medium (over TV) in Italy, Japan, Canada, India, Germany, UK, China, USA, Nigeria, Indonesia, Brazil, and Saudi Arabia.

Milward Brown AdReaction, 2014

TV is not going away, but the game has changed and marketers still don’t spend as much time on mobile as is warranted by the time consumers spend on it.

WHY IT MATTERS

97% of global smartphone operating systems (Android, iOS, Windows) are built by companies with US headquarters.

IDC, 2013

While there has been significant growth across the globe in internet users and internet companies, the core technology powering one of the most important internet devices (smartphones and tablets) are still owned by the US.

WHY IT MATTERS

Google’s Average Revenue Per User ($45/yr) is 6x Facebook and 12x Twitter.

SEC Filings & Comscore. ARPU = Average Revenue per User, defined as annualized revenue per Monthly Active User (MAU). Google ARPU is calculated using Google’s gross revenue & Comscore unique visitors.

While platforms are not all created equal, the fact that Google makes so much per user bodes well for still maturing Internet Giants like Facebook and Twitter.

WHY IT MATTERS

Americans spend 4x more time on mobile devices (20% of total media consumption) compared to newspapers and magazines.

Advertising spend based on IAB data for full year 2013.

Despite the incredible time spent on mobile devices, print pulls 19% of total ad revenue, vs 4% for mobile. That’s a $30B gap that Mary Meeker of KPCB believes will eventually get closed.

WHY IT MATTERS

Mobile apps generated $26B in 2013, more than 2x the revenue of mobile ads.

Global Mobile App revenue per Strategy Analytics; Global Mobile Advertising revenue per PWC

Given the fact that mobile continues to struggle to convert time spent into ad dollars, it’s possible that revenue from subscriptions, virtual goods, and downloads is where the most opportunity is for mobile.

WHY IT MATTERS

Social

The social referral half-life of a tweet is 6.5 hours, a Facebook post: 9 hours.

Shareaholic, 3/14. SimpleReach, 5/14.

There is always more content in the stream. Your content has to stand out and it probably needs to be re-shared multiple times to get its full reach.

WHY IT MATTERS

Top Twitter news publishers are BBC and NYTimes while top Facebook news publishers are BuzzFeed and Huffington Post.

NewsWhip - Spike, 4/14

Nothing shows the differences between platforms than what kinds of content is popular there. The audience on Facebook prefers more consumer/lifestyle content while Twitter users prefer more professional / “important” news.

WHY IT MATTERS

6 global mobile messaging services (WhatsApp, Line, WeChat, KakaoTalk, Snapchat and Viber) now total over 1B users in less than 5 years

Publicly disclosed company data for 2013. Note: Snapchat messages / day = # of snaps sent and #

Compared to North American and Europe (19% and 16% respectively) Asia and Africa are truly mobile-first continents, where a significant portion of Internet traffic going through smartphones.

WHY IT MATTERS

Software is Eating the World

Only 1.3B music tracks were sold in 2013, versus 118B tracks streamed.

Nielsen & Billboard 2013 US Music Report, 1/14

This the first year on record where digital music track sales have fallen. Spotify, Pandora, and other music streaming services have completely taken over digital music.

WHY IT MATTERS

Bitcoin wallets grew by 800% in 2013 to reach 5M globally by March 2014.

CoinDesk

Cryptocurrency is a real thing and only getting bigger. Those wallets are split across five major companies.

WHY IT MATTERS

70% of 4-year college grads had to borrow money, with the average debt around $30k/

The Institute for 25 College Access & Success, 2014. Consumer Financial Protection Bureau. ‘Voice of the Graduate,’ McKinsey / Chegg.

Post-secondary education is expensive and underperforming. 33% of grads don’t feel their their education prepared them well for employment. Can you imagine a product that put you into 5 figure debt with such a low rating?

WHY IT MATTERS

Education technology companies Coursera, Khan Academy, and Duolingo boast userbases of 7M, 10M, and 25M respectively.

Duolingo, Coursera, Kahn Academy Company Data

Major educational platforms are emerging as the poor ROI on college pushes students to seek new opportunities to learn and prepare for the job market.

WHY IT MATTERS

Eventbrite sold over 58M tickets to 1M events (60% growth) in 2013.

Eventbrite Company Data

Traditional ticketing companies like Live Nation have stalled out, selling just under 150M tickets each year for the past 3 years. Technology driven companies like Eventbrite are hot on their tails.

WHY IT MATTERS

Grubhub had 39M meal orders to just 29k restaurants in 2013.

Grubhub Company Data

Not only is online food ordering a totally commonplace thing, but the amount of leverage marketplace companies hold over their suppliers can be immense (1345 : 1 ratio of meals to restaurants)

WHY IT MATTERS

Sensors, Data, and Analytics

There are 1.8B images shared every single day on just 5 platforms (FB, Instagram, Snapchat, WhatsApp, Flickr).

KPCB estimates based on publicly disclosed company data, 2014 YTD data per latest as of 5/14

Visual content are coming to dominate our digital experiences, which means that high quality image are going to key part of every marketer’s arsenal.

WHY IT MATTERS

The iPhone 5s (2013) contains five sensors. The Galaxy 5s (2014) contains ten.

Publicly available data from Apple & Samsung, and third party reviews

While wearables get a lot of the attention when it comes to real-time, personal analytics, we can’t forget that smartphones are actually the most prevalent and powerful sensors today.

WHY IT MATTERS

AppDynamics, an app performance monitoring company, has tracked 500B web/mobile transactions

AppDynamics Company Data

We’ve been generating tons of data, but most of it hasn’t been analyzed. Data mining and organization tools are growing quickly to help businesses and consumers make sense of their data.

WHY IT MATTERS

Nest has helped consumers save 2B Kilowatt hours via smart thermostat controls since 2011.

Based on Nest comparison of actual schedules and set points to a hypothetical (holding constant temperature)

The data analytics can be tied directly into responsiveness – resulting in seriously powerful outcomes.

WHY IT MATTERS

TV and Video

YouTube’s top six stars have between 6M and 26M subscribers and all have seen 50%+ Y/Y growth.

YouTube, 5/14

New mediums produce new stars despite the unfair advantage existing players have because the context, style, and audience is different.

WHY IT MATTERS

Spectator Gaming is a new genre of video, with the leader, Twitch, reporting 12B minutes of video game footage watched by 45M users in April 2014.

Twitch Company Data. Qwilt, 4/14

Video games are not a massive medium in of itself, but as with most popular things, watching people perform signals the cultural significance (and marketing opportunity) in video games spectators.

WHY IT MATTERS

TV viewers who simultaneously use Twitter have up to 100% higher rates of ad recall, brand favorability, and purchase intent.

Twitter x TV Study, Millward Brown Digital, 12/13

It doesn’t have to be either or. Television is still an important medium that can be enhanced via integrated social campaigns on mobile platforms.

WHY IT MATTERS

Millennials spend 3x as much time watching Online TV compared to non Millenials.

Verizon Digital Media Study, 3/14

TV producers and networks have to adapt to the fact that Millenials want far more control over the content they consume and the way they consume it.

WHY IT MATTERS

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