RjM’s take on Internet Trends for 2018

Donovan Cronkhite
President, RJM

Posted On June 14, 2018

Mary Meeker’s Internet Trends Report is out!

“Mary who?” you ask?

A partner at the venture capital firm Kleiner Perkins, she has been covering the emerging technology markets since early in her career. Serving on the boards of companies such as Square and DocuSign, she releases a yearly report on trends on the Internet. And the report is no light reading – this year’s spans 294 slides and covers everything from monthly active users for social media to the U.S. GDP and unemployment rates.

Released on May 30, we understand if you haven’t spent the time to go through all 294 slides quite yet. So, we thought we’d take a moment to pull out the important points that we saw.

We’re all just addicted to the same smartphone

This probably comes as no surprise, but we’re a bit addicted to our smartphones. It’s come to a point where Apple announced at the beginning of June that they’re going to release an app that will allow users to get reports on how much time they spend with each app, and limit the time that they use the app.

We’re not getting more mobile, per se, as we are more addicted. Smartphone sales growth has hit 0% across the globe and global Internet users have slowed to a 7% growth rate. We have hit a 50% penetration rate across the world of Internet users, and gains past this point look to be slow. But that doesn’t mean to expect less website traffic!

In 2017, digital media usage still saw a 4% growth, with the growth happening on mobile and other connected devices. WiFi network adoption is still on a vertical growth climb, crossing 40MM available networks globally. Add to that, 60% of transactions are now conducted digitally – not in-store. Ecommerce growth – up 16%. Amazon’s market share. Messaging apps. Mobile video. Up, up and up.

The takeaways for businesses:

  • We’ve probably hit peak smartphone. It’s no longer about the device, but about the person using it.
  • Being mobile is now a cost of doing business. It’s not a “nice to have” but a “must have”. All roads start online. 60% of them finish there as well.
  • Your website better be fast, mobile-first, and connected. Google Business listings, social media, ecommerce – it’s an ecosystem that all fits together and feeds upon itself.

It’s a battle online

If a bit of you cringed at the thought of 60% of all transactions being digital, it’s not surprising. The ecommerce world can be though. Differentiation and brand positioning can be difficult to create in a world of commodity products. It’s not shocking to see that feeling backed up in numbers. Consumer goods prices have fallen, and hard online. While prices in offline sales have dropped just 1%, online has fallen 3%.

Ecommerce is driving efficiencies and competition that is reducing prices for customers all over the world. We probably are thankful for this in our personal lives, but when it comes to business, it’s a bit of a different story. While online hit some industries hard off a while ago – think travel agents – no one will be left unscathed soon.

Look no further than disruptions in the hotel and transportation industries. Airbnb listings are up to 5MM globally now, with the user base growing faster than the listings can keep up. This is driving down prices in metropolitan cities across the world. The difference in average prices between a hotel and Airbnb in New York - $119 – and in Toronto - $79.

For transportation, it’s the same story. Uber and Lyft are taking a bite not only out of the traditional taxi business, but from public transportation and car ownership as well. There are now 3MM global driver-partners for Uber, growing 50% in the last year. And sales figures are trending right along with the growth in drivers.

The takeaways for businesses:

  • If tech companies haven’t disrupted your business yet, you may be next.
  • Customers are being trained that there may be less expensive options. And they’re available at their fingertips.
  • Americans are saving less, taking on more debt, and being eaten by increased costs in housing, insurance and healthcare. That means they’re looking for deals in other areas of their life – and finding them through tech solutions.

Moving too fast?

Does all of this feel like it’s moving a bit too fast? That’s because it is.

It took over 45 years for electricity to reach 25% adoption rates in the U.S. For radio, over 30 years. Television did a bit better at just under 30 years. Even the personal computer took 15 years. But mobile phones and the Internet – in the 5 to 7-year range. To build on that feeling, the Internet went on to achieve 50% adoption within another eight years.

In 2015 we were creating 12 Zettabytes of data a year. Let’s stop there for a minute. A Zettabyte is one sextillion. One trillion gigabytes. A 12 and then 21 zeros.

In 2005 we created 0.1 Zettabytes. In ten years we increased our information creation by 11.9 Zettabytes a year. On that growth curve, by 2025 we’ll be creating 163 Zettabytes of information a year. And not all of that is content marketing.

We’re cataloging and storing much of our daily lives. Photos uploaded to Facebook, tracking data from Google, your morning walk stored in the FitBit, machine learning, artificial intelligence, medical records, credit card payments – we’re racking up the digital aspects of life. Large, smart companies are taking that data and cataloging it. Allowing for it to be indexed, searched, cross-referenced, personalized and put back out into the world.

From 2015 to 2017 the growth in queries on Google for “xxxx near me” were up 900%. Collected, indexed, personalized, searched and delivered means happy customers.

Takeaways for businesses:

  • The world is changing fast. Faster than ever before.
  • We’re creating more data than ever before. How you use that data is what’s important. Take advantage of it to provide a customer service, not be creepy, and you’ll be rewarded.
  • Even when the Internet gets more global, the customer’s world stays local. Pay attention to local advertising initiatives as “near me” will become an important term.

We’ve barely talked about advertising

True. But we’re concerned with the customer first, then shape the advertising around them. Let’s talk about what they’re doing versus what companies are doing for a second.

In the report, there is a great chart that showcases the shift between time spent on media to the percent of advertising dollars. While interesting, it is probably the least shocking slide in the entire document.

It comes as no surprise that the time spent watching television is down while radio and print remain flat. Desktop usage is also down, to no shock either. Which leaves mobile devices as the growth platform, which we talked about earlier.

What may be more surprising is how companies continue to pour money into certain media. Even though print commands only 4% of time, it still gets 9% of advertising spend. Businesses have also cut their radio spend, creating an opportunity gap on the media. The big opportunity remains on mobile. 29% of time is spent on mobile media, and rising, while only 26% of all advertising dollars go there. This gap is worth approximately $7 billion.

In some ways, this is understandable. Mobile traffic tends to be a little more on the move, sticking around for less time, unwilling to invest the time to search or find anything not presented right away.

This is not necessarily their fault though. It is our responsibility to serve our customers, and if they are mobile, so must we be. Yes, that will reshape your business, forcing more change. Those who take advantage of this trend will be rewarded however.

What does that mean? Easy to use mobile websites. Clear, concise information presented on a single page. Video. Actionable steps outlined for the customer. Phone numbers on every page, not just the contact page. Up to date, engaging social media profiles. Local SEO.

Takeaways for businesses:

  • Businesses are still making advertising decisions based on something other than your customer. Pay attention to their habits and adjust your media dollars to match.
  • Mobile is where the opportunity is, but that opportunity comes in a variety of different forms. Don’t look at mobile as just one thing. It’s a customer on the move with a device. Adapt from there.
  • Don’t write off the media until you’ve optimized for it. If mobile advertising didn’t work, make sure your platform is as optimized as possible before writing off the media.