It’s that time of year again,
summer is here and… Wait… Who cares about summer, the Mary Meeker report is here!!!!
A good place to start this journey through wonderful slides with graphs is by assessing the Internet market and where it’s going. The Internet population keeps on growing, even though the growth has stagnated at 10% YoY in 2016, which is more or less the same growth as seen in 2015. The total Internet population is reaching around 3.4 billion users, which means that global Internet penetration is at 46% in 2016.
This has some interesting consequences. To start with, this year Internet ad spend is projected to surpass TV ad spend globally.
This means that if your business card includes the word “marketing”, and you have yet to take on digital media, you should start worrying right about yesterday or even the day before that. Chances are that most of your competition has gained a lot of experience on what works for them in the Internet ad space.
The statistics are quite clear; The growth in Internet advertising spend is accelerating fast and particularly in the US market, Internet advertising spend growth raised from 20% YoY in 2015 to 22% YoY in 2016.
Interestingly that growth is coming off the back of a drop in desktop advertising spend. Instead, the growth is actually being enabled by a huge rise in mobile advertising spend. This should serve as an eye-opener for the vast majority of advertisers, who have yet to recognize this development and act upon it. Despite the fact that this was also the case last year when comparing 2014 with 2015.
The biggest opportunity in advertising right now is mobile when comparing ad spend to time spent on each individual channel. The two most visited websites in the world being Google, YouTube (part of Google) and Facebook. These are also the two biggest players in online advertising, accounting combined for 85% (and rising) of the Internet advertising growth. Consequently, it is not surprising that print is still the most overspend media when looking at the time spent on that specific media channel. The graph subsequently sends a clear signal to the head of marketing that companies should start applying these stats when allocating ad spending and focus on reaching customers, where they are.
One thing to keep an eye on in the future will be the ever-present rule of Fragmentation follows scale. It is happening already and we will see this market space get even more heavily populated and fragmented in the near future.
This is an interesting development and indicates that these two players have had an admirable ability to adapt and renew their business. That certainly comes as very little of a surprise as we have been able to see these players launch everything from Virtual Reality hardware to self-driving cars. Meanwhile, a good and perhaps more grounded indication of this adaptability can be seen in the improvement and subsequent rise in the use of voice searches. As we saw the accuracy of voice searches rise to around 95%, use of voice searches soared to 20% of all mobile queries. Interestingly this is likely to increase with all the voice assistant devices hitting the market right now (e.g. HomePod, Amazon Echo, Google Home etc.), and it will be really exciting in terms of advertising, we can still only guess which ad forms will be available leveraging these devices.
One very interesting insight from Mary Meeker’s report and a good way to round off these thoughts on the future and where the world is going would be this particular slide:
Take this as my small contribution to the already existing myriad of criticism towards one particular President. This graph shows a list of the most highly valued tech companies in the world right now. Out of the American companies to make it to this list 60% were founded by 1st or 2nd generation Americans. Furthermore, between them, they have more than 1.5 million employees. Just a small thought to ponder, in this current state of building walls and denying entry to people.