Winning on the internet: Mary Meeker’s 2019 insights

Published on the 20/06/2019 | Written by Heather Wright

Mary Meeker internet report

Pictures, pricing and privacy key takeaways from latest Internet report…

It’s that time of the year again – Mary Meeker’s annual internet report, now in its 24th year has dropped. And this year’s report paints a picture of commerce infiltrating apps and services of all kinds.

Meeker’s reports are legendary, highlighting internet trends impacting the business world, along with health and education markets.

Meeker, now a venture capitalist and general partner at VC firm Bond ap where she raised US$1.25 billion for a growth fund last year, began producing the reports back in 1995 when she was an analyst at Morgan Stanley.

So what are some of the key takeaways from the mammoth 334 page report? Read on…

Effective and efficient marketing needed to win customers – at a competitive price point
The report highlights the impact of the mobile revolution. In 2010 just eight percent of our time was spent on mobile devices and just 0.5 percent of advertising spend – that’s now soared to 33 percent on both fronts. Desktop meanwhile has dropped from 25 percent to 18 percent of our time and advertising spend. TV is down from 43 percent to 34 percent.

“Effective + efficient marketing = one’s own product + happy customers + recommendations.”

Google and Facebook continue to lead for US-based advertising platform revenue’s global sales, up 1.4 and 1.9 times respectively, since Q1 2017.  However, it’s the smaller players of Amazon, Twitter, Snap and Pinterest who are growing faster with a combine rate of 2.6 times.

Meeker highlighted the better targeting and techniques, such as machine learning with automatically time-edited clips on YouTube, shoppable catalogues on Pinterest and promoted tweets on Twitter as ad share gain drivers.

Customer acquisition cost, however, took a sharp climb heading towards $50 per user activation, with Meeker noting customer acquisition cost can’t exceed life time value for very long.

Meeker’s equation for success: “Effective + efficient marketing = one’s own product + happy customers + recommendations.”

She noted effective and efficient marketing can include free trials or tiers, such as those offered by many online streaming services to lure users to try a new service, and cited Spotify and Zoom as examples of companies where happy customers of their freemium model equals free user conversion to paid subscribers.

On the recommendations front, she highlighted subscription box services being recommended to new users by someone.

But Meeker also flagged privacy concerns as a potential unknown impact on ad targeting.

E-commerce is worth it but make sure there are pictures
E-commerce recorded ‘solid’ growth of 12.4 percent year on year growth in the US – faster than the bricks and mortar growth of two percent – to gain 15 percent of the retail market.

Globally, Meeker highlights the success of a range of online marketplaces with data-driven, direct fulfilment growing rapidly.

And don’t forget to include photos. Meeker notes the foundations for image creation – smartphone/camera base, smartphone power, cellular data use and Wifi reach – continue to ramp-up as does image sharing. Back in 2006, Twitter was text only. In 2019, more than 50 percent of tweet impressions are images, video or other media such as Gifs and audio.

Instagram, meanwhile, has gone from image sharing to data driven discovery, image and video stories and now commerce, while Pinterest has grown from image organisation and sharing to include video, image powered search and image driven discovery and commerce.

Tech rules the world
Seven of the top 10 global market capitalisation leaders are from the technology sector the report shows, with Microsoft, Amazon, Apple and Alphabet leading the way. Facebook, Alibaba and Tencent also make the cut.

Outside of tech, only financial services – Berkshire Hathaway at number five, and Visa (9) – and tenth placed Johnson & Johnson (healthcare) made it into the top 10.

Both the US and China held stable when it comes to the number of companies from each country in the top 30 companies for market capitalisation leaders – with the 18 US companies and seven Chinese (each country shed one company from the top 30).

Australia’s Atlassian makes a showing on the list at 24 – up 509 percent. The biggest mover is Canada’s Shopify, up 1,297 percent, followed by US-based Square, up 808 percent. China’s Baidu was the only company in the top 30 to record a fall, down 36 percent.

Cloud services continuing to soar
Cloud services revenues for Google, Amazon and Microsoft are nearing $14 billion collectively – up 58 percent year on year, with cloud deployments now accounting or 22 percent of enterprise workloads – two times that of five years ago. as much as five years ago.

More than half the population is now on the internet
Fifty-one percent of the world’s population are now online, up six percent – and two percentage points – on 2017 figures to cross the half way mark for the first time. The growth, while solid, is slowing, down from seven percent last year.


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