Mary Meeker’s annual internet trends report is a must read for media leaders. Brimming with rich data and case studies from around the world, this year’s iteration clocks in at a whopping 355 pages; making it an exhaustive – and exhausting – read.
As in previous years (read my analysis of the 2016 and 2015 releases) Meeker highlights the slowing of internet and mobile take-up, the continued rise and evolution of e-commerce, as well as digital dynamics in major emerging markets such as India and China.
But alongside this, there are plenty of surprises too. Described by Recode as “the most anticipated slide deck of the year” (an admittedly rather niche category) here are eight of the most arresting charts from the 2017 study.
1. Ad Blocking isn’t just a western phenomenon
TheMediaBriefing has written before about the ad blocking juggernaut; an important topic for many industry leaders.
These conversations often risk being quite western-centric, even though the evidence suggests that ad blocking is a widespread global practice. Meeker’s presentation reinforces this international perspective, highlighting the rise of mobile ad blocking.
A relatively new phenomenon, more than a quarter of mobile internet users in India use ad blockers. In Indonesia (estimated to be home to over 70 million smartphone users by the end of 2017) that figure rises to over half. This take-up dwarfs nations like Germany, the UK and the US, where desktop ad blocking is much more commonplace, even though our media consumption is increasingly mobile-led.
2. Incentives can help create a better advertising experience
In order to address ad blocking, it’s imperative that publishers improve the mobile experience, by “building better ads” and explaining why ads may be necessary (depending on their business model).
As Jim Freeman, the Commercial Director of Sales and Trading at the Telegraph Media Group, acknowledged at the Digital Media Strategies 2017 conference:
“There’s huge negativity around digital advertising – ad blocking, fraud, and now fake news. But advertising doesn’t have to be the enemy – it can be memorable.”
Arguably, however, mobile advertising is all too often memorable for all the wrong reasons. Annoying pre-rolls, pop-ups which are seemingly impossible to close, and adverts opening in new windows, are just some of my own pet peeves.
Citing research from Milward Brown, which covers markets as diverse as Argentina, Mexico, the US and Australia, Meeker identifies the more favourable reception that incentive based – and skippable – video ads, may receive. Publishers around the world should take note.
3. Smaller screens now account for more than 50 percent of our media time
Meeker’s annual analysis of “time spend on media vs. proportion of ad spend” continues to attract a lot of attention. Josh Benton at Nieman Lab has a nice piece charting these changes over the past five years, noting that:
“Since 2011, the amount of time Americans spend with print has dropped about 40 percent. But the amount of ad dollars that go to print has dropped even more.”
No wonder then that he calls this “the scariest chart in Mary Meeker’s slide deck for newspapers.”
For me, however, what’s most striking from this page is that in the US time spent on internet and mobile devices now accounts for 58 percent of total media time – more than TV, radio and print altogether.
TV is already the second – or even third screen – for many younger consumers. It won’t be long before this media habit becomes mainstream for many other demographics too.
4. Global internet ad spend will overtake TV this year
Given this continued shift in media consumption to mobile and online platforms, it’s not surprising that a greater proportion of ad dollars are being directed towards these channels.
PwC predicted that, globally, internet ad spend would overtake TV last year. Meeker’s deck, which uses data from Zenith, anticipates this transition will occur in 2017.
Either way, the trend line is clear. Ad dollars are increasingly internet focused, making it even more imperative that the online and mobile advertising experience is a good as possible.
5. ‘You Got It (The Right Stuff)’ – the (relatively) New Kids on the Media Block are reaping the digital rewards
In two decades, internet advertising has become the leading platform for ad spend. Within this, two of the biggest players in the US, Google and Facebook, continue to see sizable growth in their digital revenues.
Between 2015-16, ad revenues at Facebook were up 62 percent year-on-year.
Google, which enjoys a larger share of the market, is witnessing slower growth. But at +20 percent year-on-year this is certainly not to be sniffed at.
6. Pinterest’s eCommerce potential is growing
I wrote, in response to last year’s deck, that “Pinterest may be a sleeping giant” when it comes to our growing preference for a more visually-led online experience.
The number of photos and videos shared on major social networks has more than doubled in the past two years, with no sign of this abating.
Against this backdrop, Pinterest could be a dark horse. The image saving service is not just a home for holiday ideas, kitchen designs and a bucket list for shoe lovers. Meeker’s research found that 15 percent of users view videos on the services, and 10 percent use it for news.”
This year’s Pinterest prophesy focuses more on retail.
Meeker shows that in the past two years audiences are increasingly identifying Pinterest ahead of other digital platforms – such as Facebook, Google, Snap and Instagram – as a place to browse for products you want to buy. Moreover, audiences are also more inclined to think of Pinterest as “a great place to buy things online” than they were in 2015.
It should be noted that this finding is based on Pinterest’s own research, so without being able to see this study, the conclusions should be treated with a little caution. But it’s another indicator that Pinterest continues to be a platform to watch.
7. Time spent watching Netflix up 669 percent since 2010-11
Another platform which continues to transform itself is Netflix. It’s now four years since “the streaming and mail-in rental service” (as Hollywood Reporter referred to it in late 2012,) unleashed House of Cards on the world, following it with a slew of other original, high-quality, productions.
As Wired reported earlier this year:
“Original content is paying off for Netflix in a big, big way. The company just recorded the biggest quarter in its 19-year history, handily beating Wall Street’s expectations while adding a record 7.05 million subscribers.
“…In 2016, Netflix spent $5 billion on original programming. Five of the 10 shows people searched for most often last year are Netflix originals, company officials said, citing Google data during an earnings call. Eager to build on that, Netflix plans to spend $6 billion creating 1000 hours of new content this year, more than doubling its 2016 lineup.”
Meeker’s deck shows the impact of this, with Netflix enjoying massive growth in the past half-decade, with only CBS (just) and Discovery – among the other major US TV Networks – enjoying growth (in terms of monthly minutes watched) during that time.
Netflix is now the fourth most watched TV service in the US, ahead of Time Warner, Viacom and hot on the heels of services from established providers like 21st Century Fox and Disney.
8. Spotify’s growth doesn’t necessarily translate into profit
Finally, tucked away on Slide 158 is the startling story of the growth of another streaming service: Spotify. In just nine years, it has gone from being responsible for zero to 20 percent of the global music industry’s revenues.
The service announced it had 100 million monthly global users in June 2016, with Reuters commenting at the time that:
“Spotify, founded in 2006, pays more than 80 percent of its revenue to record labels and artists.”
Despite this, they observed, the service “has not yet shown a profit as it spends to grow internationally. Last year, it made an operating loss of 184.5 million euros ($209 million), widening from 165.1 million in 2014.”
As of March 2017, Spotify had 50 million paying subscribers worldwide, up from 30 million paying subscribers just twelve months previously.
“Adding 20 million paying users in a single year is an amazing feat, and it proves that the masses are waking up to the idea of paying for streaming music.”
The service is predicted to hit 100 million paying users sometime around 2020, although they may reach this target sooner if this more recent uptake continues.
Damian Radcliffe is the Carolyn S. Chambers Professor in Journalism at the University of Oregon, a Fellow at the Tow Center for Digital Journalism at Columbia University, an Honorary Research Fellow at Cardiff University’s School of Journalism, Media and Culture Studies and a Fellow of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA).
He is an experienced Digital Analyst, Consultant, Journalist and Researcher – and a former Editor of TheMediaBriefing – who has worked in editorial, research, teaching and policy positions for the past two decades in the UK, Middle East and USA.
Connect with him on Twitter at: @damianradcliffe