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The Biggest Takeaways from Mary Meeker’s 2016 Internet Trends Report

Susan Etlinger
Screen Shot 2016-06-02 at 2.56.18 PM

Yesterday at the Code Conference, Mary Meeker released her Internet Trends 2016; 213 pages of statistics on the state of all things Internet: advertising and commerce; video, images and messaging; voice and transportation, plus a look at Internet trends, macro trends, the state of China…you get the picture. Here are a few big takeaways: 

  • With the exception of India, Internet growth is flat, reaching 3B users or 42% of the global population.

  • Global smartphone unit shipments are slowing dramatically; up 10% versus 28% year over year.

  • New Internet users are harder to acquire, given high penetration in developed markets.

  • At the same time, we’re also seeing a slowdown in the growth of global GDP

The “net net”, as Meeker says, is that the days of easy growth are behind us. If we look at some more granular trends, we see some interesting patterns emerge:

  • Advertisers need to drop that remote. Advertisers continue to be over-indexed in legacy media, meaning that they spend proportionally more on media (such as TV) compared to consumer time spent, and less in media such as mobile, in which users spend significantly more time.

  • Consumers are blocking your ads anyway, especially in mobile. Ad-blocking usage is way up; 16% in desktop and 94% in mobile.

  • Except Snapchat. Video ads can work well; case in point is Snapchat’s 3Vs: Vertical, Video and (full screen) Viewing

  •  Love your millienials. At 27%, they are now the largest segment of the population. 

  • Categories are so last year. Accepted boundaries between products, brands and retailers are disappearing. Physical is digital and vice versa. This is completely up-ending conventional wisdom about the definition of a brand, a product or a delivery method. For examples, see Warby Parker, Casper, Stitch Fix, Thrive Market.

  • Hyper-targeted marketing is driving growth for retailers, products and brands. StitchFix, which uses a mix of data science and human touch for content discovery and curation, is driving personalization to unprecedented levels.

  • Communication is becoming increasingly visual. Generation Z, ages 1-20, communicates primarily in images. Video views are exploding. Candace Payne’s now-famous Chewbacca video demonstrates how live video can reach new orders of viewing magnitude. (As of 5/16/16, the Payne video had been viewed on Facebook Live 156M times, dramatically accelerating demand for the product.) Image-based platforms are increasingly becoming commerce platforms. 

  • Messaging is evolving rapidly, from simple social to business-related conversations. Case in point: Chatbots being used by HP, 1-800-Flowers, Hyatt, Rogers Communications. 

  • Voice is becoming a user interface. Mobile voice assistant usage is rapidly increasing, as is accuracy. Advantages: it’s context-sensitive, always on (especially useful in mobile & home environments). Disadvantages: still maturing in terms of accuracy.

  • Data is a growth platform. The evolution is from static and backward-looking analytics to dynamic and predictive relationship intelligence. 

  • As data usage explodes, so do privacy concerns. Consumers’ top privacy concerns are organizations selling data how and where they store it, how they identify consumers and for how long it is stored. Incidentally, I’m proud to report that this slide cites Altimeter research (page 210, if you're so inclined). 

In the interest of (relative) brevity, I haven't included everything here, so I strongly suggest you look at Meeker's report, embedded below, for more on all these topics, as well as deeper dives into the future of transportation and what's happening in China.

What does it all mean?

Here's my take: we are at an inflection point, not only with regard to the economy but in the relationship between companies and customers, technology and individuals. 

Slowing growth, combined with continued atomization of delivery channels and technologies, combined with the erasure of categories (brand, product, delivery) is both a blessing and a curse to organizations built on fundamental assumptions about the relationship between company, product and customer.

Clearly, startups like Warby Parker and Stitch Fix have the advantage of starting from a clean sheet of paper, while other companies are beholden to technology choices and organizational structures that may be older than many of their employees. 

But that doesn't need to stop us from stopping to consider the massive economic, technological and cultural shifts we are experiencing and looking at what we can do within our own organizations to make the most of them.

Customer behaviors may change based on technology and cultural trends, but understanding customers and serving them where they are, with what they need, when they need it, never goes out of style.