6 Takeaways for Marketers From Mary Meeker’s Internet Trends Report

For one day a year, slideshows are cool. This year, that day was June 1, when venture capitalist Mary Meeker and her firm KPCB released their annual internet trends report.

Meeker and co. don’t skimp when it comes to analyzing how the internet shapes the global economy—the 2016 SlideShare comes in at a hefty 213 pages. If you want to read the whole thing, we embedded the slideshow at the bottom of this post. For the sake of brevity, though, here are the six biggest takeaways for marketers.

1. We’re nearing the smartphone’s saturation point

There are 7.4 billion people in the world and about 2.5 billion smartphones. Unfortunately for iPhone and Android manufacturers, it seems as though the majority of those who can or will own a smartphone already do.

As you can see above, the vast majority of smartphone growth in the past few years has come from the Asia-Pacific market (China, India, Korea, Japan, and so on). India is one of the few countries that had year-over-year (Y/Y) growth in smartphone users in 2015 (40 percent in 2015, up from 33 percent in 2014).

Smartphone penetration remains relatively limited in what Meeker terms the MEA, or Middle East and Africa. Smartphone usage in Africa is growing significantly, but still lags behind North America, Europe, and most parts of Asia. Latin America and Africa have similar patterns when it comes to smartphones, with usage concentrated in the larger, most developed countries.

While manufacturers may be worried about the slowdown, the reality is that it’s more a result of an incredibly fast sea-change in global communications that demographically couldn’t be sustained. Smartphones took over a huge portion of the world almost overnight, and we’re still trying to understand the ramifications of the explosion.

For marketers, and anyone else whose business focuses on internet usage, the slowdown isn’t a sign to take mobile less seriously—if anything, mobile will only become more important as people spend more time on their devices.

2. Internet ad spend grew after years of stagnation

Internet advertising spend has grown steadily, but as Meeker’s chart demonstrates, year-over-year growth stagnated over the past three years. 2015 finally saw a considerable bump, mainly thanks to the surge of mobile advertising.

Comparing the chart here to the smartphone growth chart above reveals that media buyers have done a relatively decent job of keeping up with the mobile boom. Mobile year-over-year growth peaked between 2010 and 2011, as did ad spend. According to eMarketer’s numbers on mobile ad spend, expect a similar slowdown in growth in the coming years.

Interestingly, one of Meeker’s slides suggest there is a gap between time spent on mobile and mobile ad spend.

It’s one of the “most clipped” slides on SlideShare, which means that people seem to find it interesting. But it’s possible there isn’t nearly as much of a gap as Meeker has here. eMarketer’s findings from April suggest that it’s desktop that has seen underspending, while mobile spend almost exactly aligns with its share of time spent—a good reminder not to take Meeker’s slides as law.

3. Facebook and Google rule all

Facebook, as we’ve covered repeatedly here on The Content Strategist, has seen massive growth in the past couple years. Meeker’s chart above shows just how much the tech giant is driving internet advertising, mobile in particular.

Google and Facebook are threatening to become nothing less than an internet advertising duopoly. In a recent New York Times article, a Morgan Stanley analyst estimated that 85 percent of new ad spend online will go to one of the two giants.

4. Meeker has a weird obsession with Snapchat

As I suggested early, it’s important to take the internet trends report with a grain of salt since Meeker is not an impartial observer. Her firm, KPCB, has investments in a large portfolio of companies, many of which are mentioned frequently in the report—Amazon, Google, and Uber being the most significant.

Another one of those is Snapchat, the messaging app whose popularity has exploded in the past few years. KPCB raised $20 million for the company back in 2014, setting its valuation at $10 billion. That’s relevant because there are a few non-sequitur slides in the report that shower some love for the app and its advertising offerings.

The above slide, for example, which follows one that discusses the various issues with video ads, uses Snapchat as an model for how video ads can work. The supporting data looks good on the surface, but it comes directly from Snapchat and is being distributed by one of its biggest investors. There’s no way to disprove the stats—and we here at TCS aren’t immune to getting hyped by Snapchat’s intriguing ad formats—but it’s still smart to consider the source.

This is another chart that bears examination. Notice the stat that suggests more people watched NCAA football and the MTV Music Awards on Snapchat than on TV. It’s a classic case of inflation, one that Gawker dissected a few weeks ago.

Per TV ratings company Nielsen:

In our second example, the 2014 World Cup on ESPN had an average-minute TV audience of 4.6 million persons, and received 115.5 million digital views. But 4.6 million for TV and 115.5 million for digital is the wrong comparison—if we translate digital viewership into a TV metric, the average-minute digital audience of the World Cup on ESPN was 307,000, representing just 7% lift of the TV audience.

Snapchat’s metrics are even more opaque than Facebook’s, given that no one can see them except for the company itself. And comparing them to TV numbers is a case of apples and oranges.

5. Messaging apps are more popular than ever

Messaging apps like Facebook Messenger, Facebook-owned WhatsApp, WeChat, and Snapchat have seen more consistent, sustained, and significant growth than social networks in the past few years. Rather than socialize on public networks like Facebook or Twitter, people seem to be more comfortable using private apps like Messenger and WhatsApp.

These apps keep adding more functionality to widen their usage. In Asia, chat apps are already de facto home screens where many people shop, game, make plans, and order transportation. Customer service seems to be the most obvious growth area for messaging apps, and Meeker’s findings suggest why: Unlike previous generations, millennials prefer to use chat apps rather than call someone.

It makes a lot of sense. Millennials grew up using services like AOL Instant Messenger and browsing the internet for new products. Calling someone is a lot more work than entering text in a chat box. Plus, text-based customer service gives you time to think and record the conversation for reference. Many companies are already using Messenger and other messaging services to make the transition.

6. People are more concerned about personal data

The importance of privacy is something that’s easy for digital marketer’s to ignore. But perhaps spurned by the run of leaks, hacks, and security breaches that took place last year, 45 percent of people are more worried about digital security than they were a year ago.

These numbers are simply a bad look for internet companies and digital marketers—losing trust is the opposite desired outcome of advertising and marketing, and fixing the many concerns surrounding digital privacy should be a top priority for firms everywhere.