Mary Meeker and Kleiner Perkins released their annual internet trends report exploring insights into the state of
Internet User Growth Slows, Digital Media Usage Rises
According to the report, there are 3.8 billion internet users which makes up more than half of the global population—a majority of those are located in China, India, and the US.
New growth is difficult when markets reach the mainstream, reflected by the decline in new smartphone shipments in 2018 (a four percent decrease compared to zero percent last year). Mary Meeker’s report notes that internet user growth is solid but slowing given a six percent increase YoY compared to seven percent last year. Digital media usage, on the other hand, increased by two percent.
Brands leading the internet market capitalization include Microsoft, Amazon, and Apple. These leaders’ revenues, however, saw a two percent dip this year.
Monitor Customer Acquisition Costs
Despite direct-to-consumer (DTC) businesses exceeding brick and mortars, growth rates for e-commerce are also declining, as e-commerce only saw a 0.3 percent increase YoY.
Context-rich data is driving innovation and personalized products and services, contributing to higher customer satisfaction. Still, brands should think of long-term growth.
“There are areas where customer acquisition costs are rising to unsustainable levels,” the report notes. Similarly, physical retail growth numbers are down as 2018 saw a 0.4 percent decrease. Customer acquisition costs (CAC), the report says, can’t exceed lifetime value (LTV) for much longer.
Ad Spending, Video Content and Podcasts
Money spent on advertising and time spent on both mobile and desktop reached equilibrium, 33 percent and 18 percent, respectively.
Though annual internet ad spending increased by one percent, internet ad revenues saw a nine percent decrease in the US. Google and Facebook remain the leading platforms for internet ads. Additionally, the 42 percent rise reflected in programmatic ad buying is negatively impacting pricing. Geolocation data-driven ads, machine learning, shoppable catalogs, and promoted social posts are driving ad share gains.
Freemium products like Spotify and Zoom are experiencing success in customer acquisition thanks to marketing efforts that act on their audience’s interests rather than the relentless pursuit of new prospects.
The report states that mobile remains the dominant medium for internet users (6.3 percent on mobile versus two percent on desktop). Online platforms YouTube and Instagram have seen the most growth in internet users. Time spent watching video has doubled within five years, with 1.5 billion daily active users across Facebook, Instagram, and WhatsApp.
Lastly, podcast MAU almost doubled in four years with a total of 70 million listeners. The Daily (The New York Times), The Joe Rogan Experience, and Stuff You Should Know (iHeartMedia) were the top three most downloaded Apple podcasts in the US.