June 1, 2018 By FTI Consulting
There are some weeks when writing the Download comes easier than others. Sometimes the stories of the week are pretty dense, sometimes the internet’s been a bit quiet (rarer, these weeks). Occasionally, however, a bumper week comes along, when we are spoilt with subject-matter riches, and so it’s no wonder that Richard and I keep tabs on legendary VC Mary Meeker, and specifically the release date of her iconic annual KPCB Internet Trends update. This year, I get the honour of working my way through the 294-slide presentation, and picking out some highlights for your reading pleasure. So with minimal further ado.
2017 saw 49% of the world’s population (3.6bn) gain internet access, with the tip over 50% expected this year. In the US, those using the internet spend 5.9 hours each day across mobile (3.3), desktop (2.1), and other devices (0.6).
This prominence of mobile underlines how important it is to prioritise how content looks when it reaches audiences, in-feed and on the move. There remains a lag between percentage time spent on mobile and percentage of advertising spend – equating to roughly $7bn in missed opportunities for companies and advertisers.
2017 was, however, the first year that smartphone unit shipments didn’t grow – developed markets are looking increasingly saturated and producers are looking to cheaper Android devices to develop penetration into other markets. Consequently, the global selling-price of smartphones continued to decline. Tech companies nonetheless represent a huge part of western economics – accounting for 25% of the US market capitalisation in 2017.
13% of retail purchases took place online last year, and overall e-commerce grew 16% in the US, up from 14% in 2016. E-commerce is evolving, as well as scaling; mobile, interactive, personalised and in-feed/inbox contact points all now contribute towards an end sale.
Subscription models are all the rage, with Netflix (+25%), New York Times (+43%) and Spotify (+48%) all up year on year; flexible, instantly accessible content again relies on smartphones as the delivery mechanism. Alibaba is looking to expand beyond China, although Amazon still rules the roost when it comes to revenue generation (especially with 31% of its revenue coming from outside of the US, compared to Alibaba’s 8% outside of China). The most surprising number for yours truly was that more people start product searches on Amazon than on search engines now.
It wouldn’t be a 2018 digital review without some interrogation of issues around privacy, and Mary touches on this too.
The three groups identified – internet companies, internet users, and regulators – all have unique relationships with personal data and privacy. Companies aim to build better, lower-priced services, in part from user data; users spend increasing amounts of time online are becoming more discerning, and place greater emphasis on perceived value and tailoring; finally, regulators are keen to ensure user data is not misused, and ultimately kept secure.
Trust of social platforms and internet companies is considered at a low point, considering their increasingly central role in our lives. One need only look at the recent issues around Facebook’s data security, or even Netflix’s ad campaign using customer data that caught backlash. Spotify ran a similar data-driven campaign to slightly better approval, but still resulting in negative responses from consumers concerned with misuse of personal data. While the public is finding it hard to trust platforms and service providers, this creates a challenge for communication delivered through social and digital platforms. Clear, concise messages, third party endorsements, and a greater emphasis on engagement and two-way conversation may be some of the possibly solutions.