Turbotodd

Ruminations on tech, the digital media, and some golf thrown in for good measure.

Posts Tagged ‘internet trends

Turbo’s Take: Mary Meeker Internet Trends 2019

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Mary Meeker is speaking again at this year’s Code Conference, and delivering her always highly-anticipated Internet Trends Report.

Following is a CC from Vox’s highlights.

  • Some 51 percent of the world — 3.8 billion people — were internet users last year, up from 49 percent (3.6 billion) in 2017. Growth slowed to about 6 percent in 2018 because so many people have come online that new users are harder to come by. Sales of smartphones — which are the primary internet access point for many people across the globe — are declining as much of the world that is going to be online already is.
  • As of last week, seven out of 10 of the world’s most valuable companies by market cap are tech companies, with only Berkshire Hathaway, Visa, and Johnson & Johnson making the Top 10 as non-tech companies:
  1. Microsoft
  2. Amazon
  3. Apple
  4. Alphabet
  5. Berkshire Hathaway
  6. Facebook
  7. Alibaba
  8. Tencent
  9. Visa
  10. Johnson & Johnson
  • E-commerce is now 15 percent of retail sales. Its growth has slowed — up 12.4 percent in Q1 compared with a year earlier — but still towers over growth in regular retail, which was just 2 percent in Q1.
  • Internet ad spending accelerated in the US, up 22 percent in 2018. Most of the spending is still on Google and Facebook, but companies like Amazon and Twitter are getting a growing share. Some 62 percent of all digital display ad buying is for programmatic ads, which will continue to grow.
  • Customer acquisition costs — the marketing spending necessary to attract each new customer — is going up. That’s unsustainable because in some cases it surpasses the long-term revenue those customers will bring. Meeker suggests cheaper ways to acquire customers, like free trials and unpaid tiers.
  • There are a number of problems ahead for targeted advertising, including GDPR impact and other regulation, as well as pushes for more privacy from hardware and software companies like Apple and Facebook.
  • Americans are spending more time with digital media than ever: 6.3 hours a day in 2018, up 7 percent from the year before. Most of that growth is coming from mobile and other connected devices, while time spent on computers declines. People are also getting more concerned about time spent online, as more than a quarter of US adults say they’re “almost constantly online.”
  • Innovation at tech companies outside the US has remained robust. Popular areas include fulfillment, delivery, and payments.
  • Images are increasingly the means by which people communicate, as technology developments like faster wifi and better phone cameras have encouraged a surge in image taking. More than 50 percent of Twitter impressions now involve posts with images, video or other media; Twitter used to be text-only.
  • The number of interactive gamers worldwide grew 6 percent to 2.4 billion people last year, as interactive games like Fortnite become the new social media for certain people. The number of people who watch those games — rather than participate — is swelling, too.
  • As privacy becomes a bigger selling point, expect more options to make your online communications safe. In Q1, 87 percent of global web traffic was encrypted, up from 53 percent three years ago.
  • The internet will become more of a cesspool: Getting rid of problematic content becomes more difficult on a large scale, and the very nature of internet communication allows that content to be amplified much more than before. Some issues: 42 percent of US teens have experienced offensive name-calling online, terrorists are being radicalized on sites like YouTube, and social media has encouraged increased political polarization.
  • Of the top 25 most valuable tech companies, 60 percent were founded by first- or second-generation immigrants. They employed 1.9 million people last year. New stricter immigration laws could negatively impact the tech industry and perhaps prevent our next Elon Musk from getting to the US.
  • Health care is steadily becoming more digitized. Expect more telemedicine and on-demand consultations.

My takeaways:

  • There’s lots of confusion ahead for advertising, advertisers, and advertisees. Who’s going to “own” the advertising audience moving forward with a battle royale going on between handset and other device makers, developers, third-party advertising entities, e-retailers and advertising disrupters, particularly as issues of accountability, brand safety, and privacy/data regulation get fought over. And in the U.S., expect to see more First Amendment issues get challenged.
  • Mobile has become the killer app, for both advertising and, ergo, for content consumption. While broadcast TV will continue to thrive if, for no other reason, real-time sporting events, increasingly the eyeballs that matter (Generations Y, Z, and beyond…including millennials) will be watching content on something other than a TV via a mechanism that is IP-based and on the move. Agencies, advertisers, platforms, and all points beyond must adjust if they want to stay relevant.
  • E-payments are (including mobile) are, in my estimation, still a killer app that are ridiculously underserved and undertapped in the U.S. Go to China and the whole ecosystem is about WeChat mobile payments, from street vendors to Louis Vutton, and we’re still fiddling around with credit cards in the West. Expect Facebook’s play here to challenge the banking and payment status quo, and possibly even the notion of nation-state fiat currency. They have 2+ billion potential customers. And you thought the U.S. Congress wasn’t just ready for dealing with data legislation?
  • Encryption as a panacea for our privacy ills will have to be counterbalanced by the needs of the national security and sigint apparati around the globe. Don’t expect the nation state to go dark on Facebook Messenger, WhatsApp, etc. without a fight (and who knows, maybe the encryption’s already on, but so are the virtual microphones). Remember US v Apple iPhone Encryption when President Obama was still president? Yeah, that.
  • Re: Data and antitrust legislation, this is one to keep an eye on. The U.S. so far has outsourced its privacy legislation to the EU vis a vis GDPR (save for some state-based privacy legislative initiatives from the likes of California), and so far as antitrust and tech giants are concerned, there’s such a rich target set and so little resources. Regulators are going to have to pick their battles selectively, and even then, know that their efforts could put giant balls and chains around the ankles of the very innovation they would argue keep us apace on China and ROW. Also, as IBM’s Ginni Rometty says, “Data is the next natural resource.” If China generates data like oil spouting out of the original Spindletop, and the U.S./Europe stand around twiddling their thumbs and capping their virtual wells, the West could rapidly find itself at a competitive disadvantage in the Great AI Wars of the 21st Century, if not outright handicapped.
  • At the same time, we won’t be able to completely tariff our way forward (with China and Huawei, or anybody else). Uncle Sam and the academy need to continue to focus on what made Silicon Valley (and, ergo, America) great in the first place: The embrace of intellectual and academic freedom and research, smart immigration policies that encourage the best and the brightest to come to America…and (should they so choose) stay; forward looking investments and pure R&D from Uncle Sam (not unlike the Space Race, which led to so many of the innovations we enjoy today)…and, you know, rational, enlightened thinking about the future of technology and the positive (and negative) impacts it can have.

I reserve the right to have further reactions as I more fully absorb the entirety of Meeker’s always fascinating and helpful report.

Written by turbotodd

June 11, 2019 at 12:40 pm

Posted in 2019, AI, privacy

Tagged with , ,

Mary Meeker’s Latest Internet Trends Report

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Mary Meeker’s latest Internet Trends report was released yesterday, and like so many others, I’m rough and tumbling through her slides as fast as my little can keep up.  

TechCrunch provided a quick snapshot summary that I found very helpful before embarking upon my deeper dive:

Internet adoption: As of 2018, half the world population, or about 3.6 billion people, will be on the internet. That’s thanks in large part to cheaper Android phones and Wifi becoming more available, though individual services will have a tougher time adding new users as the web hits saturation.
Mobile usage: While smartphone shipments are flat and internet user growth is slowing, U.S. adults are spending more time online thanks to mobile, clocking 5.9 hours per day in 2017 versus 5.6 hours in 2016.
Mobile ads: People are shifting their time to mobile faster than ad dollars are following, creating a $7 billion mobile ad opportunity, though platforms are increasingly responsible for providing safe content to host those ads.
Crypto: Interest in cryptocurrency is exploding as Coinbase’s user count has nearly quadrupled since January 2017
Voice: Voice technology is at an inflection point due to speech recognition hitting 95% accuracy and the sales explosion for Amazon Echo which went from over 10 million to over 30 million sold in total by the end of 2017.
Daily usage – Revenue gains for services like Facebook are tightly coupled with daily user growth, showing how profitable it is to become a regular habit.
Tech investment: We’re at an all-time high for public and private investment in technology, while the top six public R&D + capex spenders are all technology companies.
Ecommerce vs Brick & Mortar: Ecommerce growth quickens as now 13% of all retail purchases happen online and parcel shipments are rising swiftly, signaling big opportunities for new shopping apps.
Amazon: More people start product searches on Amazon than search engines now, but Jeff Bezos still relies on other surfaces like Facebook and YouTube to inspire people to want things.
Subscription services: They’re seeing massive adoption, with Netflix up 25%, The New York Times up 43%, and Spotify up 48% year-over-year in 2017. A free tier accelerates conversion rates.
Education: Employees seek retraining and education from YouTube and online courses to keep up with new job requirements and pay off skyrocketing student loan debt.
Freelancing: Employees crave scheduling and work-from-home flexibility, and internet discovery of freelance work led it to grow 3X faster than total workforce growth. The on-demand workforce grew 23% in 2017 driven by Uber, Airbnb, Etsy, Upwork, and Doordash.
Transportation: People are buying fewer cars, keeping them longer, and shifting transportation spend to rideshare, which saw rides double in 2017.
Enterprise: Consumerization of the enterprise through better interfaces is spurring growth for companies like Dropbox and Slack.
China: Alibaba is expanding beyond China with strong gross merchandise volume, though Amazon still rules in revenue.
Privacy: China has a big opportunity as users there are much more willing to trade their personal data for product benefits than U.S. users, and China is claiming more spots on the top 20 internet company list while making big investments in AI.
Immigration: It is critical to a strong economy, as 56% of top U.S. companies were founded by a first- or second-generation immigrant.

So to summarize:

Half the world’s population will be on the Internet by the end of the year, but smartphone shipments are slowing.  

Voice interfaces are a small but growing minority, while tech investment is at an all-time high.  

E-commerce is creaming brick and mortar, leaving traditional retailing pockmarks across the American retail landscape. 

Amazon is the king of the e-commerce jungle, and Google may ought to be worried considering that more people start product searches on Amazon now than on search engines. 

People are more willing to pay for subscriptions now, which is a good thing, because the privacy police around the world are questioning whether the trade-off for personal information is worth the cost to consumers (and elections) of “free” services like Facebook. 

Aautomobile manufacturers had better pivot and quick, because people are buying fewer cars, keeping them longer, and increasingly willing to use ridesharing services.

Which is good for all those millions of folks now focused on making their living via the so-called “gig” economy.

In short, less phones, more Amazon, no privacy, and lots and lots of low-paying freelance gigs.

Written by turbotodd

May 31, 2018 at 10:51 am

Posted in 2018

Tagged with , ,

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