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Bond Capital’s annual 2019 Internet Trends report

By Gavin Llewellyn 12 Jul, 2019
Essential

A review of some of the most interesting and important insights from this year’s report

Mary Meeker’s annual internet trends report has become one of the most eagerly anticipated moments of the year (well, for internet/ data nerds at least!). Previously of Kleiner Perkins Caufield & Byers and now Bond Capital, Mary Meeker has been presenting key trends, statistics and predictions on the internet since 1995.

I personally find the report fascinating. It gives me the inspiration and ammunition to back new ideas, explore new concepts and take a step back and look at the world from a broader perspective. Meeker’s reports cover a wide range of macro (economy, immigration) and micro (e-commerce, digital advertising) topics that deliver a very comprehensive view of the digital world in which we live.

This year’s report provided another insightful overview, covering a huge range of areas as part of a whopping 333-page slide deck.

Bond Internet Trends 2019

I would highly recommend digesting the whole report yourself to pick out elements that resonate most with you and your business. But for those looking for some key highlights, I’ve picked out a selection of insights that I thought were particularly interesting and what they mean for marketers:

Global internet use is at >50% penetration but is slowing

Internet use has reached record numbers, with nearly four billion global internet users:

Internet penetration 2018

It appears we’re reaching saturation point as growth (at least in the West) is slowing - something echoed throughout the report. Growth slowed to 6%, primarily because so many people are already online. One of the main drivers of previous years’ growth has been the proliferation of smartphone sales, which is now declining because a large proportion of people already have one and do not feel the need to upgrade as frequently due to improved technology.

New smartphone unit shipments vs YoY growth

Technology dominates global business

Seven out of ten of the world’s most valuable companies by market capitalization are tech companies.

<h2>Technology dominates global business</h2> Seven out of ten of the world’s most valuable companies by market capitalization are tech companies:

This highlights the continued dominance of (US) big tech and their influence on the world, from e-commerce (Amazon), advertising (Google, Facebook) to hardware (Apple, Microsoft). With Apple following Amazon’s lead and pivoting towards services, we could see further disruption in new markets, including TV, financial services and gaming.

E-commerce growth is stable - but slowing

Although the report takes a predominantly US perspective, we can see these trends as a barometer for other countries in the West, including the UK. The report highlights that whilst e-commerce in the US continued to grow, this was at a slower rate (up 12.1% in Q4 2018 vs c.17% in Q4 2017), suggesting a potential saturation point.

E-commerce sales vs YoY growth

However, this doesn’t mean that there isn’t still room to grow. It’s not possible to maintain consistently high levels of growth over the long-term and therefore smart, savvy brands with a strong online value proposition (e.g. Boohoo, Etsy) there are opportunities to stand out and grab market share.

Online advertising accelerated, driven by strong creative, better targeting and high relevance

Internet advertising spend in the US was up 22% vs 21% in 2018, with a growing contribution from mobile.

Internet advertising spend

As expected, the majority of the spend is concentrated on Facebook and Google, although it’s interesting to note the increased growth from other platforms, such as Amazon, Snapchat and Twitter.

USA-based advertising platform revenue

One of the reasons I’m so interested in digital marketing is the level of innovation and change that’s constantly taking place and the report identifies four areas that are driving the growth of digital ad spend.

Social media ads

Brands and marketers are looking for options to reach their target audiences and digital gives them opportunities to customize their audiences, personalize experiences and provide new and interesting ways to buy online. It’s clear that mobile continues to be the default format and that Facebook and Google are still the primary channels to reach audiences. However, the emergence of established, and up-and-coming channels (e.g. Amazon’s move into advertising), may provide increasingly new and interesting ways to advertise online.

Internet usage has seen solid growth, driven by investment and innovation

Digital media usage in the US has accelerated, up 7% from the previous year, with Americans spending 6.3 hours a day in 2018.

Daily hours spent with digital media

The majority of growth is coming from mobile and other connected devices, while time spent on desktop/ laptop computers has declined. Again, this is a clear sign of where advertisers should be focusing their attention and the formats they should be used to engage and reach audiences.

One of the key takeaways from our review of Thinkbox’s latest research was that TV viewing is stable in the UK, giving advertisers an ideal way to reach target audiences at scale. This is also the case in the US although digital is seeing very strong growth at the expense of TV and in the latter part of 2018 more time was spent on mobile than on TV.

Television and mobile daily time spent

Video watching daily minutes

As people continue to change their viewing habits, platforms have improved their online video propositions. YouTube and Instagram have been seeing the strongest gains.

% internet users using select platforms

As the trend to (short-form) online video continues, it will be interesting to see if this translates to the UK and how marketers adapt.

People are telling stories via edited images and video

A lot of the success of platforms such as Facebook, Instagram and YouTube is related to their skill at leveraging people’s innate desire to share stories using images. Imagery is the oldest form of ‘transportable communication’ and in the last 20 years, we’ve seen the foundations laid to support effective image creation.

Smartphone stats

As a result of these foundations, we’ve seen continued improvement in functionality across several different platforms.

Pinterest evolution

Instagram evolution

This quote from Kevin Systrom, Instagram’s co-founder, sums up the power of imagery and the way digital platforms are exploiting this very well.

“People have always been visual – our brains are wired for images. Writing was a hack, a detour. Pictorial languages are how we all started to communicate – we are coming full circle. We are reverting to what is most natural. Instagram has always been a communication platform, not an image sharing tool. Instagram challenges the notion that beauty comes in a traditional, artsy form… it’s not about beauty, it’s about the story you tell. Instagram’s inherent feedback systems help users continuously improve communication skills”

Other notable trends to watch out for

As mentioned at the top of the post, at 330 slides there is a lot of information to consume, and some trends will be more relevant to some than others. So here are some other notable trends and insights from the Bond Capital report:

  • Interactive gaming is becoming an increasingly relevant way to communicate. Innovation is strong across many platforms and real-time and social in nearly all ways
  • Freemium business models have enabled companies (Spotify, Zoom, Dropbox, etc.) to rapidly grow their customer bases and convert a good proportion to paid subscriptions
  • Data and artificial intelligence, when used properly, can improve customer satisfaction. A survey of retail customers shows that people prefer brands that can provide personalized offers and recommendations

Conclusion

There is a huge amount of data and insight to take from Bond Capital’s Internet Trends report. There are many insights that I would like to have highlighted in this post but I will leave this to you to find out for yourself! Although the report takes a predominantly US focus, the trends provide very useful context for marketers operating in any industry or sector.

It’s interesting to learn that we’re starting to reach a saturation point in terms of internet usage, indicating that most target audiences are likely to be online. However, if we are to reach these audiences we need to use the right channels and formats to achieve cut-through in a very competitive space if we decide to advertise online, images and video, with a short-form focus, appear to be one of the most effective formats. TV remains dominant but digital and mobile is gaining ground, demonstrating the shifting trends and preferences across different audience demographics.

The internet’s constant change means that there will be many more internet trends reports in the future. Although not all the trends and forecasts will play out exactly as predicted (e.g. voice, VR and AR have yet to have the impact predicted in previous reports), it’s useful to understand the broader macro trends and some of the more specific micro-changes so we can factor these into our plans and strategies.

By Gavin Llewellyn

Gavin Llewellyn (LinkedIn) is an independent consultant. He is a Chartered Marketer who specialises in digital marketing, specifically in social media, SEO and online strategy. Gavin blogs at One Too Many Mornings where he offers advice, guidance and ideas on how individuals and companies can use digital marketing effectively to get found online, build engagement and generate conversion. You can Follow Gavin on Twitter and Google+.

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