THE BEST OF MARY MEEKER S 2017 INTERNET TRENDS REPORT

Transcription

1 THE BEST OF MARY MEEKER S 2017 INTERNET TRENDS REPORT

2 EXECUTIVE SUMAMRY: 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: GLOBAL TRENDS: SHIFTS TO INTERNET-ENABLED MEDIA CONTINUE TIME SPENT PER DAY ON MOBILE DEVICE IS 2X THAT OF TWO YEARS AGO 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

3 GLOBAL TRENDS: 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 Desktop usage has only declined slightly, indicating it s more of an addiction of mobile than a shift to mobile. REVENUE FROM ONLINE ADS IS UP 22 IN 2016 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. MOBILE AD-BLOCKING CONTINUES TO SKYROCKET Especially in developing markets where data costs can be high, users are increasingly blocking ads whenever they can. AD BLOCKING PENETRATION: TOP 5 MARKETS: NEARLY 400M PEOPLE AROUND THE WORLD BLOCK MOBILE ADS

4 MEDIA TRENDS: GOOGLE AND FACEBOOK LEAD AD DUOPOLY WITH 85 SHARE GROWTH IN U.S. ONLINE ADS ADVERTISERS LIKE MEASURABLE ENGAGEMENT METRICS, BUT SOME ARE FINDING MEASURING ROI CHALLENGING (AS WITH OFFLINE) SHARE OF INTERNET GROWTH: 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. 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.

5 MEDIA TRENDS: EXPENSIVE CABLE CONTINUES TO CAUSE CORD-CUTTING WHIST ONLINE STREAMING PORTALS STAY PREVALENT YOUTUBE LOSES MOBILE VIDEO SHARE AS SOCIAL MEDIA APPS WITH CONVENIENTLY SHORT CONTENT AND SERENDIPITOUS DISCOVERY DRIVE MOBILE VIDEO GROWTH NETFLIX IS SLOWLY DRAGGING DOWN TELEVISION GROWING 6.7 YOY WHILE THE TOP TV NETWORKS DECLINED AN AVERAGE OF 10 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. 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

6 MEDIA TRENDS: 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: USER & INFLUENCER GENERATED CONTENT REPURPOSED CAN GENERATE 6.9x HIGHER ENGAGEMENT THAN BRAND GENERATED CONTENT They re continuing to transform the marketplace by offering better user experiences and lower prices, while leveraging big data and scale. AMAZON PRIME AND OTHER ONLINE RETAILERS HAVE CAUSED THE PACKAGE AND PARCEL SHIPPING VOLUME TO GROW 9 YOY Their quick delivery is also having major affect on the closures of many retail chains locations. RECORDED MUSIC REVENUE FINALLY GROWING THANKS TO THE SUCCESS OF STREAMING PORTALS Representing 52 of music recording revenue compared to 0 13 years ago. 18.3M(est. ) Subscribers 50M Subscribers 20M Subscribers

7 SEARCH CONTEXT: VOICE IS BEGINNING TO REPLACE TYPING IN ONLINE QUERIES 20 OF MOBILE QUERIES WERE MADE VIA VOICE IN 2016, WHILE ACCURACY IS NOW ABOUT 95 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. TAKING PHOTOS AND USING VOICE CAN ERASE TYPING WITH THE VISUAL WEB CONTINUING TO GROW IN IMPORTANCE AND SOPHISTICATION 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 IMAGE RECOGNITION WILL SOON BE ABLE TO PROVIDE CONTEXTUAL RELEVANCE FOR BRANDS TO ADVERTISE IMAGE-BASED PLATFORM ALGORITHMS INFER IMAGES/ PROJECT AR OBJECTS INTO STORIES. IMAGE-BASED PLATFORM

8 GAMING: GAMING GOES MAINSTREAM There are nearly 2.6b quarterly video gamers now compared to 100m in 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. VIDEO GAMES SOAK UP MORE DAILY MINUTES THAN FACEBOOK IMMERSIVE GAMING TOLLS HELP IMPROVE ATHLETE PERFORMANCE 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. KEY TOOLS/ PLATFORMS CONTINUING TO EVLOVE THIS SPACE: 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

9 GAMING: E-SPORTS VIEWING TIME WAS UP 40 YOY TO 161M ACTIVE MONTHLY VIEWERS ESPORTS LEAGUE OF LEGENDS CHAMPIONSHIP VIEWERS: 43M, +19 YOY 79 <35YO 29 FEMALE Millennials: 27 have significant preference for E-sports- which is the same for traditional sports E-SPORTS LIKE TRADITIONAL SPORTS IS GENERATING MONEY STREAMS, WITH EXPANDED GAMING ECO-SYSTEM PARTNERSHIPS AND INVESTMENTS ARE HELPING BRING E-SPORTS INTO MAINSTREAM

10 RETAIL/ E-COMM: 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 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 THE LINE BETWEEN ADS/ CONTENT/ PRODUCTS AND TRANSACTIONS ARE ALL BLURRYING 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, s 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 Whereas Pinterest are turning browsing into buying via product discovery + targeted visual Pins. 26 THAT CLICKED ON A FACEBOOK AD MADE A PURCHASE DIGITALLY NATIVE BRANDS ARE GOING OFFLINE TO CREATE EXTENDED RETAIL EXPERIENCES That s not to say retail itself is dead, just mediocre retail experiences are dead Neil Blumenthal, Warby Parker

11 TECHNOLOGY: 25 OF AMERICANS OWN A WEARABLE, + 12 YOY 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. TOP SENSORS IN WRIST WEARABLES: 60 ARE WILLING TO SHARE THEIR HEALTH DATA WITH THE LIKES OF GOOGLE MEANING THAT LEADING TECH BRANDS ARE WELL- POSITIONED IN THE DIGITAL HEALTH MARKET FITNESS CATEGORY APPS LEAD THE WAY FOR HEALTH RELATED APPS WITH 36

12 CHINA DEEP- DIVE: CHINA IS IN THE GOLDEN AGE OF MOBILE ENTERTAINMENT INTERNET HOLDS 55 OF THEIR MEDIA TIME, WITH MOBILE USAGE GROWING 30 IN KEY DRIVERS BEING ECOMMERCE AND GAMES THE COMPANIES THAT ARE COMMANDING MOBILE MINUTES FROM CHINESE CONSUMERS ARE: The mobile payment capabilities have paved the gateway for Internet leaders to become diversified financial services platforms. Live-streaming receiving high consumer engagement + willingness to pay generating a strong monetization opportunities E-COMMERCE GROWTH +24 YOY

13 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