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THE BEST OF MARY MEEKER’S
2017 INTERNET TRENDS
REPORT
EXECUTIVE SUMAMRY:
GLOBAL
TRENDS:
Mary Meeker, a Partner at venture firm Kleiner Perkins Caulfied & Byers (KPCB), released her
annual Internet trends report on Wednesday. Her 355 slide presentation offers a comprehensive
look at the current world digital technology landscape and what trends we can expect to see. We
have compiled the following summary recap for your easy reading reference:
TIME SPENT PER
DAY ON MOBILE DEVICE
IS 2X THAT OF TWO YEARS
AGO
SHIFTS TO INTERNET-ENABLED MEDIA CONTINUE
18-24
49% 65+
13%
YOUNGER DEMOGRAPHICS SPENDING ALMOST HALF THEIR TIME WITH DIGITAL
COMPARED TO 65+ WHO CONTINUE TO BE DOMINATED BY TRADITIONAL FORMATS
MEDIA EVOLUTION FROM MARKETING TO MILLIONS TO
MARKETING OF ONE X MILLIONS
MOBILE SPEND IS NOW HIGHER THAN DESKTOP FOR THE FIRST TIME EVER
GLOBAL INTERNET SPEND WILL BE GREATER THAN TV IN 6 MONTHS
U.S. Adults now spend 5.6h per day on the
internet, including over 3+h per day on mobile,
compared to under 1h per day in 2011. Desktop
usage has only declined slightly, indicating it’s more of an addiction of mobile
than a shift to mobile.
PEOPLE SPEND 28% OF THEIR MEDIA
TIME ON MOBILE, yet only currently
21% of total ad spend is mobile. Indicating a huge opportunity for mobile
products to soak up this shift.
GLOBAL
TRENDS:
Especially in developing markets where data costs can be high, users are increasingly blocking ads whenever they can.
MOBILE AD-BLOCKING CONTINUES TO SKYROCKET
REVENUE FROM
ONLINE
ADS IS UP
22% IN 2016
28%
18%
24%
16%
11%
58%
28%
13%
3%
1%
AD BLOCKING PENETRATION: TOP 5
MARKETS:
NEARLY
400M PEOPLE AROUND
THE WORLD
BLOCK
MOBILE
ADS
MEDIA TRENDS:
GOOGLE AND FACEBOOK LEAD AD
DUOPOLY WITH 85% SHARE GROWTH
IN U.S. ONLINE ADS
It will increasingly become harder for other platforms to compete given their current share of market and continued pressure to
effectively respond to brands that are seeking to prove effectiveness of their ad spend,
through constant improvement in ad targeting relevance, and measurement.
SHARE OF INTERNET GROWTH:
ADVERTISERS LIKE MEASURABLE ENGAGEMENT METRICS, BUT SOME ARE FINDING MEASURING ROI CHALLENGING
(AS WITH OFFLINE)
However leading online ad platforms are working to help provide solutions for more ways to target & measure ads accurately.
THUS CLOUD WARS CONTINUE
Amazon Web services remains the undisputed leader in terms of cloud adaption, but Google and Microsoft Azure are starting to catch up.
SPENDING ON PUBLIC AND PRIVATE
CLOUDS LAST YEAR ROSE TO $36B, +37% SINCE 2014.
EXPENSIVE CABLE CONTINUES TO CAUSE CORD-CUTTING WHIST ONLINE
STREAMING PORTALS STAY PREVALENT
In 10 years,
Netflix went
from 0% to
more than 30%
of home
entertainment
revenue in the
U.S. This is
happening while
TV viewership
continues to
decline.
NETFLIX IS
SLOWLY DRAGGING DOWN TELEVISION –
GROWING 6.7% YOY WHILE THE
TOP TV NETWORKS DECLINED AN
AVERAGE OF 10%
MEDIA TRENDS:
YOUTUBE LOSES MOBILE VIDEO SHARE AS SOCIAL MEDIA APPS WITH
CONVENIENTLY SHORT CONTENT AND SERENDIPITOUS DISCOVERY DRIVE
MOBILE VIDEO GROWTH
INCENTIVE-BASED + SKIPPABLE VIDEO ADS DRIVING POSITIVE INTERACTIONS
SNAPCHAT IS BENEFITING THROUGH CONTEXTUALLY TARGETING ADS VIA ALGORITHMS LINKING TO REAL-TIME IMAGES – THUS PLACING THE RIGHT AD AT THE
RIGHT PLACE/TIME) AND IT’S BECOMING BIG BUSINESS FOR THEM
EMERGING RETAILERS + CRAFT BIG BRANDS ARE FINDING WAYS TO UTILISE UGC (IMAGES AND VIDEOS) UPLOADED ON CONSUMER’S SOCIAL CHANNELS, TO REPURPOSE
ON THEIR OWN BRANDED CHANNELS.
BRANDS THAT ARE HEAVY IN SOURCING UGC ON INSTAGRAM & RE-POSTING CONTENT:
MEDIA TRENDS:
USER & INFLUENCER GENERATED CONTENT REPURPOSED CAN GENERATE 6.9x HIGHER ENGAGEMENT THAN BRAND GENERATED CONTENT
75% 70% 62% 53% 44%
They’re continuing to transform the marketplace by offering better user experiences and lower prices, while leveraging big data and scale.
Their quick delivery is also having major
affect on the closures of many
retail chains locations.
AMAZON PRIME AND OTHER ONLINE RETAILERS HAVE CAUSED THE PACKAGE
AND PARCEL SHIPPING VOLUME TO GROW
9% YOY
RECORDED MUSIC REVENUE FINALLY GROWING THANKS TO THE SUCCESS OF
STREAMING PORTALS
Representing 52% of music recording revenue compared to 0% 13 years ago.
50M Subscribers
18.3M(est.
) Subscribers
20M Subscribers
Google, Pinterest and Facebook are using the increasing willingness of consumers to buy
online to earn revenue through visual ads for products. Thus meaning you’ll soon be served
ads based on what you’re looking at.
“A lot of future search is going to be about pictures instead of keywords – Ben
Silbermann, Pinterest Founder/ CEO”
TAKING PHOTOS AND USING VOICE CAN ERASE TYPING WITH THE VISUAL WEB
CONTINUING TO GROW IN IMPORTANCE AND SOPHISTICATION
Led heavily by the popularity and breadth of Amazon Echo and other voice assistants, such
as Apple's Siri, and Google Assistant. Currently 11m Echos installed in the U.S.
VOICE IS BEGINNING TO REPLACE TYPING IN ONLINE QUERIES
SEARCH CONTEXT:
20% OF
MOBILE
QUERIES
WERE MADE VIA
VOICE IN 2016,
WHILE ACCURACY IS
NOW ABOUT 95%
ALGORITHMS INFER IMAGES/ PROJECT AR OBJECTS INTO STORIES.
IMAGE RECOGNITION WILL SOON BE ABLE TO PROVIDE CONTEXTUAL
RELEVANCE FOR BRANDS TO ADVERTISE
IMAGE-BASED PLATFORM
IMAGE-BASED PLATFORM
GAMING GOES MAINSTREAM
There are nearly 2.6b quarterly video gamers now compared to 100m in 1995. Collaborative
play compared to individual gaming is more prominent than in the past.
GAMIFICATION SLIPS INTO ALL APPS. WHETHER DATING TO PERSONAL FINANCE, AND IT’S INFLUENCING
BUSINESS’ TOO: Gamification in virtual worlds is leading real
world simulations such as simulating cities and power/ web networks.
GAMING:
VIDEO GAMES SOAK UP
MORE DAILY MINUTES
THAN FACEBOOK
KEY TOOLS/ PLATFORMS CONTINUING TO EVLOVE THIS SPACE:
Diving into what all this interactive behavior means for consumer engagement. Gaming
can improve real-world performance through utilizing video + VR to repeatedly run plays/
scenarios, or the use video analytics to review key players and have real time digital stats to
measure performance.
IMMERSIVE GAMING TOLLS HELP IMPROVE ATHLETE PERFORMANCE
“I could go ten hours at a stretch playing soccer video games, and often spot solutions in the games that I parlayed into real life. – Zlatan
Ibrahimovic”
GAMING:
E-SPORTS VIEWING TIME WAS
UP 40% YOY TO 161M ACTIVE
MONTHLY VIEWERS
E-SPORTS LIKE TRADITIONAL SPORTS IS GENERATING MONEY STREAMS, WITH
EXPANDED GAMING ECO-SYSTEM
79%
<35YO… 29% FEMALE
ESPORTS LEAGUE OF LEGENDS
CHAMPIONSHIP VIEWERS: 43M, +19
YOY
PARTNERSHIPS AND INVESTMENTS ARE HELPING BRING E-SPORTS INTO MAINSTREAM
Millennials: 27% have significant preference for E-sports- which is the same for traditional
sports
CUSTOMER SERVICE IS SHIFTING TO CHAT WITH REAL TIME ONLINE CONVERSATIONS
There’s a rapid rise in the % of customer service conversations happening via real-time
online chat instead of phones, as users demand faster response times and wider
access. The bar for quality customer support is rising. Social media is helping drive brand accountability, Airlines are a great example that everything is documented and customer
service must be adhered to. 82% of customers stopped doing business
with a company in 2016 after a bad experience compared to 76% in 2014.
DIGITALLY NATIVE BRANDS ARE GOING OFFLINE TO CREATE EXTENDED RETAIL
EXPERIENCES
While the top internet companies all started in different industries, many are now attacking each other out of control for e-commerce,
messaging, hardware and advertising.
Facebook feed acts as browsable storefronts, emails as curated storefronts, Instagram as a motion to tap to book, and Snap/ Instagram to swipe up to buy. Facebook contextual ads are
helping drive direct purchases – via messenger
RETAIL/ E-COMM:
26% THAT
CLICKED ON A
FACEBOOK AD MADE A
PURCHASE
THE LINE BETWEEN ADS/ CONTENT/ PRODUCTS AND TRANSACTIONS ARE ALL
BLURRYING
“That’s not to say retail itself is dead, just mediocre retail experiences are dead – Neil Blumenthal, co-CEO @ Warby Parker
Stitch fix taking online retail to a whole new experience level LAUNCHING A PRIVATE-
LABEL CLOTHING BRAND THAT’LL BE COMPLETELY
COMPUTER-GENERATED BASED ON
CONSUMER DESIRE
Whereas Pinterest are turning browsing into buying
via product discovery + targeted visual Pins.
TECH IS IMPROVING HEALTHCARE
New inputs like 3D scans and wearable devices, data monitoring, willingness to share
health data, new health apps is making electronic health adaption at record time
high.
TECHNOLOGY:
25% OF AMERICANS
OWN A WEARABLE,
+ 12% YOY
MEANING THAT LEADING TECH BRANDS
ARE WELL-POSITIONED
IN THE DIGITAL HEALTH MARKET
60% ARE
WILLING TO
SHARE THEIR
HEALTH DATA WITH THE
LIKES OF
TOP SENSORS IN WRIST WEARABLES:
FITNESS CATEGORY
APPS LEAD THE WAY FOR HEALTH
RELATED APPS
WITH 36%
CHINA DEEP-
DIVE:
INTERNET HOLDS
55% OF THEIR MEDIA
TIME, WITH MOBILE USAGE
GROWING 30% IN 2016. KEY DRIVERS
BEING ECOMMERCE AND GAMES
CHINA IS IN THE GOLDEN AGE OF MOBILE ENTERTAINMENT
THE COMPANIES THAT ARE COMMANDING MOBILE MINUTES FROM CHINESE
CONSUMERS ARE:
Live-streaming receiving high
consumer engagement + willingness to
pay – generating a
strong monetization opportunities
The mobile payment capabilities have paved the gateway for Internet leaders to become
diversified financial services platforms.
E-COMMERCE GROWTH +24% YOY
KEY TAKE-
AWAYS FOR
ADIDAS: FROM THE BIG SCREEN, TO THE SMALL SCREEN, TO THE EVEN SMALLER
SCREEN
MOBILE IS DOMINATING THE DIGITAL SPACE AND HAS LARGE POTENTIAL TO BE
LEVERAGED AD $$ WISE. WE CAN EXPLORE OUR MEDIA MIXES TO MAKE SURE
WE’RE THINKING ABOUT EXPANDING THE USE OF MOBILE.
SPEED IS PARAMOUNT
THE LAG TIME IN RESPONSIVENESS AND INTERACTION WITH BRANDS
CONTINUES TO SHRINK. CONSUMERS EXPECT BRANDS TO BE ALWAYS ON,
ALWAYS ENGAGING. WHETHER THAT BE THROUGH CUSTOMER SERVICE CHAT
BOTS OR INSTANT RESULTS THROUGH VOICE & VISUAL SEARCH. WE MUST
FIND WAYS TO CAPITALIZE ON THESE NEW BEHAVIORS AND DELIVER BOTH
UTILITY AND CREATIVITY.
INCREASED FOCUS ON SELF
HUMANS ARE PLACING AN INCREASED FOCUS ON THEMSELVES AS WE MOVE
INTO THE FUTURE. WHETHER THAT BE EXPLORING OUTLETS TO EXPRESS
THEMSELVES THROUGH CREATIVITY OR TRACKING THEIR BODIES AND HEALTH
THROUGH WEARABLES. THERE IS AN INNER FOCUS WITH THIS GENERATION.
WE SHOULD EXPLORE WAYS THAT EMPOWER AND ENABLE OUR CONSUMERS
TO CONTINUE THIS SELF EXPRESSION AND MAKE IT PART OF OUR OPEN
SOURCE MODEL.
THE LEGACY PLAYERS CONTINUE TO GROW
GOOGLE AND FACEBOOK ARE DOMINATING THE MARKETPLACE; WHILE WE
SHOULD ENSURE COVERAGE WE SHOULD LOOK TO LEVERAGE OUTSIDE
PARTNERS SUCH AS SNAPCHAT WHO CAN POTENTIALLY PROVIDE GREATER
CUT-THROUGH.
AN ERA OF PEAK CONTENT
WITH STREAMING PLAYERS EXPLODING, MOBILE VIDEO ON THE RISE AND
SOCIAL NETWORKS EXPLORING ORIGINAL CONTENT, WE’RE IN AN ERA OF TOO
MUCH CONTENT, MAKING IT HARDER TO BREAK THROUGH. THIS PLACES
GREATER EMPHASIS ON CUTTING THROUGH THE CLUTTER WITH PRECISE
TARGETING, CUSTOMIZED MESSAGES, AND UNIQUE CREATIVE EXECUTIONS.
THE CUSTOMER JOURNEY IS SHRINKING
VOICE AND VISUAL SEARCH, DIGITAL COMMERCE THROUGH FACEBOOK
MESSENGER, SHOPPABLE PINS ON PINTEREST. ALL FORMS OF TECHNOLOGY
THAT ARE FUNDAMENTALLY CHANGING THE WAY CONSUMERS SHOP. SNAP A
PHOTO OF SOME SHOES YOU SEE ON THE STREET AND LIKE AND INSTANTLY
BE ABLE TO PURCHASE THEM ON YOUR SMARTPHONE. SEE A PRODUCT ON
INSTAGRAM AND PURCHASE IT THROUGH A FACEBOOK MESSENGER CHAT BOT.
WE AS MARKETERS MUST BEGIN TO RE-THINK WHAT THE CUSTOMER JOURNEY
LOOKS LIKE WITH THESE NEW TECHNOLOGIES.
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