Letter from Middlesbrough: 13 lessons from Mary Meeker’s 2019 report
Mary Meeker’s Internet Trends 2019 report is a monster. I’ve read all 300+ pages and summarised the stuff you need to know.
I’ve no idea if Mary Meeker has ever been to Middlesbrough, the post-industrial town in North Yorkshire, but I doubt it. I’m here for an athletics tournament.
Meeker has published her annual report on the state of the internet. It’s taken me 10 days to work through the 300+ page deck.
The report is packed with insights on internet adoption, devices and platforms; the internet ad market; content formats; and observations on disruptive business models and markets.
Meeker is a founder of Bond Capital and a former Kleiner Perkins partner. She’s been producing her annual report since 1995. I’m a big fan of her work.
Adoption, devices and platforms
#1 Internet adoption and usage
More people are connected to the internet worldwide than aren’t (51% vs 49%) but adoption is slowing. The global growth of internet adoption fell by one point to 6% last year. Smartphone adoption is also slowing due to saturation. It declined by 4% in the past year.
Europe (78%) and North America (89%) have the highest adoption of internet usage. Asia Pacific (48%), Africa and the Middle East (32%), Latin America and the Caribbean (62%) have the lowest adoption and greatest potential for growth.
#2 Popular platforms
The most popular platforms by daily usage are Facebook (30%), YouTube (27%), WhatsApp (25%), WeChat (23%) and Instagram (19%). Instagram and YouTube are growing fastest, up from 13% and 22% in 2017 respectively.
The internet ad market
#3 Mobile and telly ad and viewing parity
The time spent on media versus advertising revenue is in sync for desktop (18% vs 18%), TV (33%) and mobile (34%). TV and mobile are almost at parity for both viewing and ad investment. Radio is under indexed (12% vs 8%) and print is over indexed (3% vs 7%).
#4 Auto advertising
The use of programmatic ad buying has grown from 10% of digital display advertising revenue in 2012 to 62% in 2018. It’s seen as a highly effective form of media buying that dynamically automates pricing and payment in the time that it takes a web page to load. Targeting, machine learning and commerce are driving growth.
Emerging and popular content formats
#5 Listen up: what are you doing about audio?
The installed base of Amazon Echo devices has doubled to 48 million in the last two years. Echo Skills are tracking this growth with almost 100,000 skills published on the platform. It’s an area that brands should investigate.
#6 Tell me a story
Images as a medium continue to grow on the social web and internet. More than half of the impressions generated on Twitter include an image or video. Meeker calls out the use of edited and curated images as a means of storytelling.
Short form video has doubled in 12 months to more than 1.5 billion daily active users. Growth has been fuelled by Instagram Stories, Facebook and Messenger Stories and WhatsApp status updates.
The state of the internet
#7 Internet fatigue
There’s a growing concern among internet users of internet overload. More than a quarter of adults report being online almost constantly. Lack of sleep and fear of missing out are cited as negative factors. 63% of US adults actively try and limit usage leading Apple, Google, Facebook and YouTube to launch time tracking features.
#8 Splinternet: multiple internets
The internet is fracturing along the lines of platforms and local regulation. The conversation about user privacy is growing louder. Regulators are mandating policy such as GDPR in the EU. Platforms are attempting to get ahead of the issue by improving privacy management. Telegram, iMessage and WhatsApp offer end-to-end encryption as default.
#9 But the promise of the open web lives on
Open, two-way conversation is a force for good where it exists on the web according to Meeker. Reciprocal reviews on platforms such Airbnb promote confidence and trust. Twitter has been used to raise awareness for humanitarian concerns such as Hurricane Harvey and spotlight organisational and societal issues such as packaging and service.
#10 Vicious cycle of news
Live images and streaming media are heightening our sensitivity to news. 12% of people source news from Twitter, 21% from YouTube and 43% from Facebook. Traditional media platforms source and amplify stories from social media. Extreme views polarise public discourse.
Business models and markets
#11 Freemium in the enterprise
The freemium business model enabled by the cloud has evolved from gaming to enterprise and consumer markets. It’s a low cost- and risk-free form of marketing providing there are sufficient paying users to support a profitable business. Canva, DropBox, G Suite and Slack are listed as examples of success.
#12 On demand and remote work
On demand platforms are changing the nature of work, driving efficiencies and disrupting markets as diverse as accommodation, food delivery, transportation. Platforms such as Airbnb, Etsy and Uber are creating new sources of income, skills and flexible work.
Technology is also enabling a remote workforce. Five percent of US workers are employed remotely. The report cites Slack, Google Documents, Airtable and Help Scout as enabling technologies.
#13 Turning the classroom inside out
The education market is rapidly being disrupted by technology. More than 500 billion post-secondary classes were broadcast via the internet last year. Machine learning (Stanford), learning (UC San Diego), wellbeing (Yale), crypto and bitcoin (Princeton) and algorithms (Princeton) made up the top five courses on Coursera in 2018. Completion rates are around 50% compared with 90% for a traditional degree. Teacher, student and parent communication is shifting to messaging platforms. Europe makes up a fifth of the market.
Watch out for a #FuturePRoof podcast from Sarah and l later this week. We’ve attempted to distil the Meeker report into 20 minutes.
I’m taking another week off from writing my letter next week. Sarah and I have the second part of our Indian-style wedding with friends and family on our houseboat in London. I’ll be back in a couple of weeks. In the meantime, keep learning.
If you like this letter, please forward it to a couple of friends by email and recommend that they sign-up. Social shares are also appreciated but they rarely result in new people subscribing to my letter. Thank you.