Adrienne Wallace, a digital strategist at BlackTruck Media + Marketing, contributed to this post.
For those of us who navigate the digital world, the day that Mary Meeker presents the annual "Internet Trends" report is our version of Christmas morning. Meeker presented the highly anticipated report on June 11 at the Vox/Recode Code Conference in Scottsdale, Arizona. The report, affectionately known as the “Meeker Report,” was started by Meeker back in 1995 and has been a guiding light for those in tech, internet marketing and investments in such entities, giving direction to their future outlook.
While the presentation is a lengthy 333 slides deep, it’s full of interesting data points and historical references you should consider keeping tabs on for those growing in the tech space or digital media. One caveat is that at the end of the day, Meeker and her firm, Bond Capital, are in the business of investing in high-tech, which doesn’t necessarily apply to everyone else, so our goal is to cut through the clutter of the 333 slides and highlight some elements you might want to keep an eye out for, trends that are slowing, and the like. This is not a prescription for panic or changing things overnight as a result of this report. The “queen of the internet” would not want you to do that and we don’t either. Allow us to break down a few elements of this report for the Grand Rapids market:
Courtesy BlackTruck Media & Marketing
Global internet users slow
Over half (51%) of people in the world are now online as of 2018. While this number is up a few points from where it was in 2017 (49%), this growth is slowing. Much of this can be attributed to the fact that by now, adoption of the internet and “being online” and connected is so commonplace that there are simply not that many new users to come online each year.
Mobile consumption is king
Similar to the declining trend in internet users as a whole, Meeker points out a similar slowing trend with the purchase of new smart phones. For those concerned with this stat, I encourage you to think about the last time you saw someone with a flip phone? Simply put, the majority share of the population has adopted smartphones already, meaning the bulk of the “new” phones being purchased are replacing other smartphones. It should be no secret that mobile is king. Over 60% of searches are now performed on a mobile device. It’s to the point that Google rolled out its “mobile first index” in 2018 to be more representative of those searching the internet.
And while not included in the report, we have moved far beyond millennials, who were touted previously as the big drivers of the digital generation. We’re now seeing some of the first of the iGen population (born between 1995-2012) out in the workforce for a few years now. Many of these individuals know little of traditional media outlets and were born directly into a digital-first era, mobile devices, wearables, etc.
I challenge those still worried about how they’re going to attract the attention of millennials and pivot toward how you’re going to engage with iGen, because they’re not the next generation, they’re the now generation you need to be talking with.
If approximately 3.8 billion individuals are on the internet, only 8% of those are here in the United States. According to Meeker, 21% of the world’s internet users are from China. Eastern countries like China represent the largest and fastest growing regions for those interacting in the online space.
Before we make snap judgments, consider the population of these two countries. By the numbers (2017 census), China has 1,379,302,770 people, whereas the United States has 326,625,791. Meaning yes, we would expect eastern countries such as China to have a dominant role as internet users globally.
E-commerce and digital payments
Meeker states that approximately 15% of all retail sales in 2018 were via e-commerce channels, and the trend has slowed slightly to 12.4% in Q1 2019. Even with this slight slowdown, e-commerce sales growth continues to grow over that of regular retail. It is good to point out that even as digitally-minded as Meeker’s report is, you can see that more revenue is still generated by physical retail locations.
Image via bondcap.com
Image via bondcap.com
Many of the e-commerce sales and growth also is driven by big-box retailers, the types that have strong integrations and ties back to their retail storefronts. In the end, the internet user now can have a seamless experience from online to store and vice-versa. Whether your business currently operates sales online or in-store only, these are trends to keep an eye on. Consumers want convenience and depth of selection — which is what the internet provides us.
Smart retailers will find ways to deliver better customer experiences, service and easy access to the products they desire, as well as flexible payment options. They will ethically use customer data to personalize the shopping experience and win over more consumers. They also will combine customer purchase data with that of brand/product interactions, and consumers will remain loyal to purchase more — especially if there is an easy e-commerce component involved.
Social media trust wars
Social media channels, especially Facebook, have come under fire a number of times in the past year for questionable practices with data, what was being allowed for ad targeting, etc. For some users, their trust was completely lost. But for every one or two of those users that are feeling like Facebook doesn’t have their best interest in mind, the majority share of users are becoming more aware, but probably don’t care and will continue to check and accept the terms and conditions placed in front of them.
Image via bondcap.com
Image and experiential-based social media channels are growing. Instagram continues to grow and outperform others, whereas platforms such as YouTube are gaining for the most amount of time spent engaged in content. Instagram, while owned by Facebook, has the power of telling stories through images and video, and we are a visual people. The advertising platform is seamless and not intrusive to the user, again furthering the personalization aspect that Meeker noted. As for YouTube, we’re well into the age of “cord cutters,” and while services like Hulu and Netflix dominate the streaming model, YouTube is huge with DIY, how-to and influencer audiences. However, not mentioned in the trends report is a stat from 2017, which was the first year since 2014 where the largest source of referrals to a brand’s website was from search engines — not social media.
Digital vs. traditional
In 2019, the spend on digital advertising will surpass traditional ads and media being purchased. With tech giants Google, Facebook and Amazon all leading the charge, Meeker’s trend report shows further insight as to why these digital platforms continue to grow. Yes, an obvious answer is more people are online than ever before. Looking at some of the advancements by platform as outlined by Meeker, we see some distinct differences that help the space improve, and for marketers, this is a key area.
Targeting and customization of audiences, combined with advancements in machine learning, continues to win with major players in the digital ad space. Meeker points out the growth of shopping in social media channels (i.e. Pinterest) is gaining ground due to the level of personalization built in. In the end, digital ads provide marketers an opportunity to develop campaigns that are hyper-targeted and highly relevant to their audiences, and can be well optimized and tracked for a growing return on ad spend.
Image via bondcap.com
The growth in this space is not without its own shortcomings. Meeker’s report indicates we could be reaching a slight saturation point, meaning the amount of ads placed and dollars spent is starting to pace out closely to how much time we all spend online. What the report highlights is that over time, the cost to run ads in a digital space will go up. Basic economics principles always have applied to advertising and digital ads are no different. There are only so many ad slots, positions, platforms, etc., and they are matched with only so many people either active on those outlets, searching, etc., as well as more companies shifting their ad dollars to digital. The digital ad space will become more competitive and we will see costs increase either by industry niche, regions or time of year.
What’s important to remember is that, to date, there still is no other form of advertising that can be managed as effectively and measured to the level that digital ads can be.
Image via bondcap.com
Concerns with advertising in the future fall under the gray area of privacy. Similar to what was mentioned about social media usage, advertisers are being pressured by regulatory issues such as GDPR, devices and operating systems touting ad blocking, and the push toward a higher level of privacy online. This is why it is important to own your customer data and use it in an ethical fashion.
We know that was a lot, so here are the bullets without the narrative above. Our biggest takeaways are:
- Over half of all human beings are online. Not just in the U.S., but the entire world or 3.8 billion users.
- Only 8% of internet users are in the U.S., whereas 21% are from China, the largest and fastest-growing region.
- While brick-and-mortar retailers continue to generate the most revenue, e-commerce plus digital payment forms continue to rise every year.
- Social media channels lost trust of their users, starting just after the 2016 election year. Not mentioned here is that in 2017, referrals to websites from search engines (Google, Bing, Yahoo) surpassed that of social media sites. A trend that has not been witnessed in a number of years.
- Digital advertising surpassed that of traditional advertising and media.
- Ad spend in digital media and our time spent on mobile devices has reached somewhat of an equilibrium. Meaning ad space is becoming more competitive, costs will rise and availability will tighten.