Some observations from Mary Meeker’s Annual Internet Trends Presentation
Wake up C-Suite, we’re past key tipping points #CEO #CMO #CRO #CPO … the Kleiner Perkins 2018 Internet Trends … ignore at your peril or worse …
I was going to try cover all the facts, figures and trends in this year’s 2018 Internet Trends Report, but it was too much for me and probably for you. So here are some specific observations, comments, tips and a bit of dry (irish) humor.
The Big Numbers: Overall user growth slowing, market saturation of devices, Internet users at 3.6BN+ (7% growth — still good) — half the world now has access. Digital daily usage is at 5.9 hours total, 3.3 hours spent on mobile (avg. per user).
Key Observations:
Simplicity is pervasive = easy to use >Messaging, Commerce, Video/Audio
Digital Payments is expanding, mass market usage & friction points declining Watch out for the “buy button” it is the fastest growing touch point for consumer usage. Transactions usage: Digital = 60% vs. In-Store = 40% (some overlap)
Offline and Online connections influence each other e.g. ~175k active neighborhoods in US on Next-door; and of course Tinder :)
Move to lightweight / throwaway platforms, Messaging extensibility: in message branding, content, apps … FB Messenger is now at 1.3BN+ MAU (monthly average users). Messaging is the email for Millennials & GenZ, GenXers following fast (how about all those distracting LinkedIn messages :)
Video on mobile doubling every year 35M+ views a day now — not just teens, it is becoming ubiquitous for B2B brands too, when was the last website you landed on without some cute animation or overly long video? And new video content types? — Twitch, if you have no idea what it is, ask a teen
Voice is now at human accuracy threshold: 95% accuracy. Leading the way is Google Search, Amazon Echo (be careful about what you say in front of it)
Personalization — more data collected means ability to deliver better experiences. Note: ability, we are seeing all the same mistakes happening from Web 1.0, Web 2.0, Social/Mobile … “let’s jam our product and brand messages down people’s throats, and if we use your first name = personalized, NO”. It is at first generation successes (still a long way to go) e.g.: FB Newsfeed (including, the fake); Spotify Discovery (no, just because I clicked on Taylor Swift does not mean I like Country Pop); Netflix (assuming you have more late 60’s Hippy Sub Culture movies); Waze real time nav: Snap Map, what is that? at 100M MAU, check it out below
Facebook — Yes, social media engagement does convert to monetization: FB AARP (avg. annual revenue per user) gone from $16 in 2015 to nearly $40 in 2017, slight hiccups in 2018 (data sharing anyone?)
Privacy & Regulation driving new consequences, nobody is sure yet where that all falls out. GDPR by the EU is a good start, and is (was) an actual opportunity for marketers depending on: are you interested in volume vanity metrics? or addressable market and interested prospects/customers? (though you would not know that by the 98% of emails sent out about privacy & GDPR — can we send you any more terrible experiences?)
Who are top brands/companies in the US? The growth ones with the high market caps all seem to have 2 common pillars: investment in R&D and Capex. Yes you have to spend to grow and stay relevant. Interestingly 6 of top 15 are Tech Companies, the fastest growing sectors in US is Tech 2X to 4X most other sectors, with Healthcare tracking in the same direction. This all = “growth” and “innovation” (still need a narrower definition on that word ‘innovation’ than is thrown around, over hyped, over used, under achieved)
eCommerce is NOW ~13% of Retail Sales, at the current rate of growth, it will pass 50% sometime in the next decade … Is large footprint brick & mortar the core of your 10 year strategy, may you want to rethink that?
More interesting data, facts and key points on eCommerce as the Value Chain is pretty seamless now with best of breed easy to integrate components:
Payment — POS, Invoices, Payroll etc … plenty of examples
Online Store — e.g. Shopify, Squarespace, Amazon Store, Vertical Markets like Etsy etc …
Online Payment — e.g. Stripe …
Fraud Prevention — e.g. Signifyd …
Purchase Financing — e.g. Affirm … so your customer can pay monthly or as a subscription (business model changes)
Customer Support — real-time … e.g. Intercom (the ex-pat in me loves seeing them in there)
Finding Customers (hold on is that not my job, there is a product that does that now — hmmm) — e.g. Criteo … there are 1000s of ways to go about this, still lots of expansion using FB for consumers (all the hype & news aside — you can target by multiple criteria and good content still wins out) or LinkedIn (under-utilized by B2B marketers — high quality LTV customers, maybe not volume you want yet, but quality)
Delivering Product — USPS (thanks to Amazon’s help on last mile :), UPS, Fedex …
And all the above are low cost of entry and per transaction cost models … It’s never been easier to start a store, assuming you have a great product, can keep the marketing simple, get customers/testimonials, and it works, to disrupt any market … Though guess what it comes back too the best experiences for customers and prospects, and CX (customer experience) is just really 3 things: your products, your content and your people (assuming we still need them)
For eCom: product search as many or more people are searching on Amazon as on Search Engines (why do we say plural — it’s really just Google, sorry Yahoo & AOL). And there are really 2 types of online marketing drivers:
(A little lesson from me, a pet peeve)
Demand Fulfillment i.e. people know what they want and ‘search’ for it. And please, search is way more than SEO it’s all your content & messaging (sorry to all the SEO keyword experts out there)
Demand Generation i.e. people need to discover they need your product/service, often they don’t know a product exists or they used to buy something different. Here you have to create the demand, bottom up and often a customer at a time (yep, that’s how most successful startups work, successful). And to create demand — online discovery often (mostly) happens on platforms like FB and Instagram (my own fav for new things, plus the content is far more happier, though for the day that is in it — I found out first about Anthony Bourdain’s death on IG, so if your audience is into cooking and travel guess where they spend hours daily and first go when they wake up)
Some of the bigger movement trends to watch, big bets: Google from Adwords to Home Ordering on Google Assistant; Amazon from 1-click checkout to Sponsored Products … Hey hold on are they both flipping, ad to eCom and eCom to Ad? Ad revenues still rising by X factors for Google, Amazon & FB
My own fav, Social Media. It: Drives product discovery and Drives purchases — fact!
A fact: (survey results) 55% of purchasers have bought a product online after social media discovery — wake up marketers, it’s where your disruptive companions are eating your lunch while you are still eating breakfast (see slide 73). And Yes, it is not easy to figure out how to make it all work (well it is if you are in it for the long game and willing to invest time/content into it) — it is still early as in 6% of eCom comes from a direct social media referral (from under 2% 3 years ago — do the math on where it is going and how fast)
Cost of Acquisition (on digital and on social media) is going up, but it still is relatively better ROI that other channels, and it’s never one channel one touch (99% of the time). For CMO’s— it is about ROI on LTV (if you need to look that up — retire or find a new career, I am only being half sarcastic here)
Data, nothing to be said really, it’s exhausting and important, one tip: it’s not the data, it’s the insights you derive from patterns in your data
There is a lot more to digest in the Internet Trends 2018 Presentation … so a couple of one liners:
Shopping = entertainment. I’d say much of marketing content is now either funtainment or infotainment
New retail? maybe it’s taking the old with the new and flipping some of the usage upside down and taking on more vertical integration and ownership or as Jack Ma says, “putting the right products in front of the right customers at the right time” (heard those words before — see, the old is the new), don’t worry you are not fighting that one yet — let Amazon and Alibaba figure that out on their cash and fail fast initiatives, first — watch the components that work for them and copy, if you can
Digital Advertising is gone mobile, really they are only seeing that now, up to 80% of consumer see a product/brand/content on mobile first for a couple of years now, slow to the game?
Advertising is dead, it’s now Content, and that’s not just repurposing Ads into sponsored content or advertorials (the most stupid name I’ve heard for an product, the consumer is not stupid)
Consumers = making ends meet = difficult. This is something I have to explain to B2B marketers, product managers and sales teams, there is not new additional budget for your product/services, 99% of the time you need to take it from existing budgets and product/services purchases. So it better be better!
Macro shifts in household spending: Shelter + Pension/Insurance + Healthcare all Up … Food, Entertainment & Apparel are Down. Though, the devil is in the details for many consumer products e.g. candy to kid’s budget is now iPhone + Games budget, bubble gum anyone? Or buying Cable is now Netflix Or Zipcar rather than buy a Chevy? — the down shifts, have huge disruptive opportunities too
eCommerce is helping consumers with reduced pricing — funny how that internet can be good for us. Consumers who spend, pay attention to Value + Price (it’s both). Bring it on for Healthcare, the consumerization … of many industries …
How about the Enterprise, Workplace, Companies, Careers … all that stuff … it’s disrupting too … the AI CMO?
Tech Disruption at Work, it is not new … it’s accelerating … job displacement … the AI Robot? ‘sure it can’t do what I do’, say that to the car washer worker of 75 years ago …
Aircraft replaced Locomotive jobs
Services replaced Agriculture
The overall outlook is good as in: low unemployment rates, consumer confidence index up, new job openings, average income rising ??? not so sure about the latter for 99% of people
Trends to watch as an employer: flexible time (the freelance workforce & on-demand work); working from home or the coffee shop; healthcare (in the short term) and then the obvious ‘pay’
AI, well there is enough hype on it, most if it is not really AI, but it is coming — when machines learn not only faster but better …
I am going to skip much of the rest of the presentation (slides 170+) — read at your own leisure and plenty of eye candy growth graphs for your next trends presentation.
Wrapping up with these screenshots:
Life Long Learning (the focus here is on your career)
For the Enterprise here is huge one, ignore at your peril
Yep, the 50 year old gamer or 25 year old Snapchatter does not suddenly walk into work to use sticks and stones — they expect technology to look & work just like on their iPhone … e.g. Dropbox simple UX (confession here: I am in the DropBox alpha user group & have left 7 or 8 enterprise Dropbox accounts behind at companies I worked with :); Slack real-time simple communications(just don’t allow more than 3 channels please)
If only … :
It’s real easy, Yep (sarcasm & extreme dry humor), good luck executing with a group of disparate groups, mis-aligned goals & so called gurus on this one … ignoring the elephant in the room …
A tip: highly collaborative UX and product development = a thoroughbred horse that came out as a camel … sorry but it maybe skunk works like models for many of these project especially the high quality CX/UX/UI requirements … then expand from there
There is a very good article on “Innovators + Entrepreneurs” in corporate organizations in “The Innovation Stack” by Steve Blank, a must read if you want, need, tried and cannot make the leap required to remain relevant in your market.
Thanks to Mary Meeker, the team at Kleiner Perkins and all the contributors to another fantastic presentation in 2018, some links to the presentation:
http://www.kpcb.com/internet-trends
https://www.linkedin.com/feed/update/urn:li:activity:6407636916551979009
