13 media, marketing and PR insights from Mary Meeker’s Internet Trends 2018 report

Reposted with permission from Stephen Waddington

There’s lots to learn for media, marketing and PR from Mary Meeker’s annual Internet report but be wary of the US bias if you live or work elsewhere.

Mary Meeker, an analyst turned venture capitalist at Kleiner Perkins Caufield Byers (KPCB), has published her annual Internet Trends report for 2018.

Internet usage, voice innovation, the impact of search and social on the marketing funnel, the modernisation of retail, and the future of work are all highlights from the report.

I’ve worked my way through the 300 page report this weekend. Here’s what I spotted.

#1 Internet growth slows down

The growth of internet adoption has slowed from 12% in 2016, to 7% in 2017. 50% of the world’s population, 3.6 billion people, are now on the internet. Future growth will come from developing markets.

#2 Internet usage continues to grow

US citizens spend an average of 5.9 hours accessing digital media, however the data isn’t deduped to account for dual screen usage, for example when people use a tablet while watching digital TV.

#3 Removing friction between people and organisations

The integration of messaging, media and commerce provides a significant growth opportunity. It’s also a means of improving the relationship between people and organisations. Mobile payments are becoming easier. China has 500 million active payment users.

#4 Voice innovation

Voice recognition services have crossed the 95% accuracy threshold deemed acceptable for consumer usage. Voice services such as Amazon Alexa and Google Assistant are poised for rapid innovation and growth. Alexa has 30 million installed Echo devices in the US, and 30,000 ‘skills’.

#5 Privacy paradox

Data is enabling social networks and apps to serve personalised services and experiences to consumers. 79% of consumers are willing to share data if there is clear personal benefit. However the growth of organisations such as Facebook and data breaches have resulted in increased public scrutiny and calls for regulation.

#6 Regulation of social media platforms

Internet companies need to consider the unintended consequences of their products and services. Social media services can be applied equally for good and bad. Legislation is out of sync with innovation. Meeker calls on regulators to be mindful of overzealous control.

#7 Ad mismatch

The cost of performance advertising is rising and its effectiveness is decreasing. In the past 12 months Facebook click through rate (CTR) costs have increased by 61%, and cost per thousand impressions (CPM) have increased by 112%.

#8 Content management

Google and Facebook have begun to take proactive steps to remove inappropriate content after advertisers pulled their campaigns through fear of the reputational impact. Google removed 8 million videos in Q4 2017. It plans to hire 10,000 moderators in 2018. Meanwhile Facebook removed 518 million fake accounts in Q1 2018, and 21 million pieces of lewd content. It also plans to hire 7,500 moderators.

#9 Product search and social media attribution

The retail might of Amazon is undeniable. It’s become an important promotional platform. It’s the start point for 49% of product searches with search engines making up 36% of the market. Unlike Facebook and Google, Amazon captures every area of a purchase including search advertising, sale and fulfilment.

If Amazon and search drive purchase at the bottom of the marketing funnel, social media is responsible for product discovery at the top. Almost 80% of 18 to 34 year old consumers report purchasing a product after discovering it on social media. Social media referrals account for six percent of traffic to ecommerce web sites, up from 2% in 2015.

#10 Modernisation of retail

Retail continues to shift online. No surprises. The US market grew 16% in 2017 to more than $450 million. Internet sales account for 13% of the US retail market, and Amazon accounts for 28% of this market. Online prices have fallen by two percent in real terms in the past two years.

#11 Alibaba vs Amazon

Alibaba, China’s equivalent of Amazon, is recognised as an organisation that uses data insights from billions of transactions per month to provide insights into consumer trends for its retail partners. It has developed a comprehensive ecosystem of platforms, logistics and payments to support the digital transformation of retail.

#12 Subscription business models

Direct to customer subscription models are identified as a strong growth area. They also create a long term and sustainable relationship. Try before you buy conversion optimises marketing, customer acquisition and profit. Examples include DropBox (cloud storage), Legal Zoom (legal services), Netflix (video), New York Times (media), and Spotify (music).

#13 Evolution of employment

Meeker makes the case for technology creating new jobs. Job openings in the US are at an all-time high since 2000. Online platforms such as DoorDash and Uber, and internet marketplaces such as AirBnB, Etsy and Upwork are meeting the need for flexible working solutions and working from home.