The Digital Marketing Revolution: 22 Years in 16 Charts

In the last two decades, three trends in technology have transformed the way people communicate: search, social, and mobile.

As entrepreneurs like Mark Zuckerberg or Steve Jobs created new tools for digital communication, brands, startup founders, and venture capitalists rushed in to take advantage of this ever expanding universe.

This is a story about the digital marketing revolution that sparked thousands of companies and billions of dollars, almost by accident.

The Revolution in Search

Perc

ent o

f Web

Ref

erra

ls

25%

50%

75%

100%

2001 2002 2003 2004

Google Share of Referrals Yahoo Share of Referrals

Share of web referrals, Google versus Yahoo

WebWideStory

It was 1996. Searching on the web was clunky and inefficient because it was largely done using directories or engines that scanned pages for keyword hits. By 2003, a startup operating in a garage in Menlo Park, CA would disrupt the entire search engine market with an algorithm that ranked pages based on the quality of backlinks. That startup was Google.

Marketing technology companies founded each year

Percolate, Inc.

Google’s democratization of web information and discovery coincided with the rise of a new class of tech companies focused on online advertising.

Com

pani

es

10

20

30

40

50

60

70

80

90

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Social Platforms and Online Communities Advertising and Media Infrastructure

Marketing technology funding over time

Percolate, Inc.

And venture capital followed—for a time.

Vent

ure

Cap

ital (

USD)

$30M

$60M

$90M

$120M

$150M

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Social Platforms and Online Communities Advertising and MediaInfrastructure Total funding

The dotcom bubble - NASDAQ composite index

NASDAQ GIDS

The infamous dotcom bubble stifled venture capital and the overall growth of the industry. But Google’s approach to ranking based on backlinks also meant that popular experiences had an easier time generating momentum—and in just a few years, digital marketing would see another resurgence.

Stoc

k clo

sing

pric

e

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

1/4/1993 11/15/1993 9/29/1994 8/14/1995 6/26/1996 5/9/1997 3/25/1998 2/8/1999 12/21/1999 11/2/2000 9/25/2001 8/9/2002 6/25/2003

Stock closing price (USD)

The Rise of Social

Facebook monthly active users

Facebook, Inc

In 2004, Facebook launched out of a dorm room in Harvard, just a year after MySpace and LinkedIn got started. In the span of 4 years, Facebook went from 1 million users to a hundred times that—and things kept going.

Mon

thly

Act

ive

User

s

400M

800M

1,200M

1,600M

2,000M

12/1/2004 12/1/2006 10/1/2007 1/1/2009 4/1/2009 9/1/2009 2/1/2010 9/1/2010 2/1/2011 9/1/2011 4/1/2012 10/1/2012 3/1/2013 1/1/2014 7/1/2014 6/1/2015

Monthly Active Users (in millions)

Percent of online U.S. adults on social media

Pew Research Center

Social was more than just popular; it quickly became a central means of participation on the web. By 2009, about half of US adults online were on some social network.

Onl

ine

Adul

ts on

Soc

ial M

edia

25%

50%

75%

100%

2/1/2005 8/1/2006 5/1/2008 4/1/2009 5/1/2010 8/1/2011 12/1/2012 5/1/2013 9/1/2013 1/1/2014

Percent of Online US Adults on Social Media

Marketing technology companies founded each year

Percolate, Inc

Companies which focused on marketing software and infrastructure were founded rapidly after Facebook’s start. Social networks, which prioritized acquiring users over monetization, found themselves quickly supporting ads. A second marketing revolution had begun.

Com

pani

es

25

50

75

100

125

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Advertising and Media Infrastructure

The Move to Smart, Mobile Devices

Global Apple iPhone sales

Statista, Apple

On June 29, 2007, the first iPhone finally greeted long lines of customers camped outside of Apple and AT&T stores. Sales would surpass a million that fiscal year; by 2012, sales would surpass 100 million.

Appl

e iP

hone

Sal

es (M

illio

ns)

40M

80M

120M

160M

200M

2007 2008 2009 2010 2011 2012 2013 2014

iPhone sales

Percent of U.S. adults owning a smartphone over time

Pew Research Center

It was the start of broad-based smartphone adoption. By 2011, over a third of U.S. adults had a smartphone.

Onl

ine

Adul

ts on

Soc

ial M

edia

25%

50%

75%

100%

2/1/2005 8/1/2006 5/1/2008 4/1/2009 5/1/2010 8/1/2011 12/1/2012 5/1/2013 9/1/2013 1/1/2014

Percent of Online US Adults on Social Media

Time U.S. adults spend with devices a day

Mary Meeker’s 2015 Internet Trends Report

Connected mobile phones meant that users were spending more time than ever on the web—watching videos, sending messages, and on social media.

Hou

rs

2

4

6

8

10

12

2010 2011 2012 2013 2014 2015

TV Other Connected Devices Desktop/Laptop Mobile

Monthly active users for top 4 social networks and messaging apps

BI Intelligence

Illustrating this shift, mobile messaging apps have become even more popular than the largest traditional social networks.

Mon

thly

Act

ive

User

s

440

880

1,320

1,760

2,200

4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

Monthly Active Users on Big 4 Messaging Apps (WhatsApp, Facebook Messenger, WeChat, Viber)Monthly Active Users on Big 4 Social Networks (Facebook, Twitter, LinkedIn, Instagram)

Mobile traffic by application category

Cisco

Mobile’s constant connectivity and sundry applications has contributed to enormous amounts of data and web traffic. This surge in available information opened the door to new types of digital marketing companies.

Terra

byte

s Pe

r Mon

th

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2014 2015 2016 2017 2018 2019

Web/Data/VoIP Video Audio Streaming File Sharing

Big Data and the Internet of Things

Marketing technology funding over time

Percolate, Inc

Quietly, VCs have been investing more and more in the companies building better mobile advertising experiences on top of social networks, or harnessing the large amounts of data these networks generate.

Vent

ure

Cap

itral

(Bill

ions

)

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

9,000,000,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Social Platforms and Online Communities Advertising and Media Infrastructure

Marketing technology infrastructure funding over time

Percolate, Inc

Historic amounts of venture capital is going into marketing technology that acts as basic data infrastructure.

Vent

ure

Cap

itral

(Bill

ions

)

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Cloud and Big Data Infrastructure for Marketing Marketing Technology Infrastructure

Number of connected devices in use

Percolate, Inc

The Internet of Things, where every day objects and machines are connected wirelessly to the web, will magnify and take advantage of those large amounts of data.

Devi

ces

in U

se (B

illio

ns)

5

10

15

20

25

30

35

2013 2014 2015E 2016E 2017E 2018E 2019E

Personal Computers Smartphones Tablets Connected/Smart Tvs Wearables Connected Cars Internet of Things

Global economic benefit of the Internet of Things

McKinsey Global Institute

Wearable devices, as well as connected cars, appliances, packaging labels, and other wireless objects will become increasingly common, changing the way people connect to each other, brands, government, and their healthcare services, while generating trillions in revenue.

Trill

ions

3

6

9

12

15

2015 2020 2025

Low estimate High estimate

Google, Facebook, and Apple changed the way we connect with one another, revolutionizing the digital marketing industry along the way.

Companies, entrepreneurs and venture capitalists will create new forms of marketing to take advantage of tomorrow’s connected world.

New hardware, software, and available information will transform all industries and disciplines—marketing, business, and health included.

A sample of approximately 1500 software companies from Scott Brinker’s “Marketing Technology Landscape Supergraphic” was analyzed and combined with publicly available financial and funding data to create these visuals.

Sources are cited with each chart.

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