Like a wide-eyed child being handed a birthday present, each year I eagerly await Mary Meeker’s annual internet trends report to see what’s inside. The Kleiner Perkins analyst usually packs her report with meaningful information, that we further investigate to help our clients’ marketing strategies across the board. While broad in nature, Ms. Meeker’s insights serve as mile-markers for our clients helping us and them better understand our own biases in an inherently media and customer fragmented ecosystem.
When we read or conduct research, we do it because the volume of marketing platforms and content has frankly become overwhelming, and honestly unreasonable. Any CMO worth their salt believes the same. Despite the hype generated in our field, not every technology or idea is worthy, no matter how many experts scream it from the top of their lungs while waving white papers. The digital landscape is littered with marketing waste and useless technology, hyped by product makers and “experts” who benefit directly from fanning flames that often produce more smoke than fire. Today, more than ever, it’s vital to understand what’s meaningful and what’s not. So, what’s in the report that matters?
Let’s take a look…
Several areas of the report, in particular, caught my attention. There are no real surprises here, the internet and its many digital offspring continue to bash their way disruptively into every corner of our economic and social lives, and at time blurring those lines at breakneck speed. While the report is jampacked with data and trend goodness, three areas are key to our customers:
Consumer Engagement
Businesses looking to engage customers are offering more real-time web/digital support integrated into their shopping experience. 2018 saw the number of real-time customer conversations on digital platforms spike to about 500 million. Messaging apps continue to be on fire, with a total user base of about 3 billion. WhatsApp is leading the way at 1.5 billion users, and with messaging apps integrated eCommerce functionality, it’s likely that we see a continued growing trend and perhaps at a faster rate in the movement of bricks and mortar shopping in the near future.
Amazon Echo installed base is giving a lift to voice with over 30 million installed units in Q4 2017 alone, while Amazon Echo Skills growing astonishingly from zero in 2015 to 30,000 in 2018. And with Google’s machine learning word accuracy at 95% now, their possibilities of consumer engagement through voice are essentially limitless.
E-Commerce
We can’t start this section without starting with Amazon. According to the report a whopping 49% of product searches begin at Amazon, followed by “Search Engine” at 36%. Perhaps that may explain why product delivery from the USPS, UPS, and FedEx in 2017 continued their steady growth with almost 11 billion deliveries, the majority by USPS followed by UPS and FedEx.
The research found that mobile payment represented 60% of all transactions in 2017, with China’s appetite for mobile payment growing to almost 600 million users. That trend will likely continue as more people adopt digital payment systems and even cryptocurrencies, as Coinbase saw its registered users quadrupedal in 2017.
Mobile shopping app sessions’ year to year growth is an impressive 6% outpacing sessions for music/entertainment and business and finance.
Social Media to E-Commerce
The report acknowledges Procter & Gamble’s recent reduction on its social media marketing by $140 Million, citing poor returns compared with its marketing in traditional areas, as well as concerns about brand safety. That said, Facebook eCommerce click-through rates (CTRs) seem to be rising through 2017 Q3, Q4 and Q1 2018 to about 3%. At the same time, advertisers are seeing their return on ad spend drop because ad costs are rising faster than the rate of reach, which is troubling for those who rely on social media to drive eCommerce.
Internet Advertising: Internet advertising grew by an unimpressive 1% year to year 2016–2017 with mobile advertising representing almost 60% of the pie. Interestingly, the report compares percentage of time spent in media with percentage of advertising spend and finds a deficit in mobile with time spent at 29% while percent of advertising spend is 26% representing a $7 Billion opportunity. Though, with the proliferation of fake social media accounts and fake news coupled with social networks, including Facebook’s resistance to privacy concerns, it is right for advertisers to exercise extreme caution in this space.
Where Do We Go From Here
At our firm we have always talked about the lifetime value of the customer, and I am glad the report address it (albeit on one slide). Within the context of all this data, marketing isn’t simply about acquiring customers, but keeping them, and keeping them coming back for more, assuming the brand experience is on target. One thing is for sure, the report underlines the need to clearly focus business goals but requires a meaningful understanding of the fragility of the digital landscape as you ponder marketing investment dollars in the space. Tread lightly here because the digital marketing landscape is only going to get more confusing, though remember it is in the interest of digital marketing platforms and software companies to continue to push their products. That’s their prerogative. We are seeing more reliable data coming from traditional outlets, including some interesting results from radio. We continue to see strong results from certain TV outlets as programming gets stickier and customer immersion events are also seeing a strong revival as experiential marketing helps deliver a different experience to the customer.
As for us, we continue to advocate the value found in integrated marketing strategies. It takes leadership and courage from the good folks at P&G divest from social by taking a step back to compare results across eco-systems based on ROI (not necessarily sales and varies depending on the business and product life-cycle), in order to make business-driven decisions about marketing investment. Finally, let’s not get caught up in the quicksand of “analytics” either. As Einstein said, “Not everything that counts can be measured. Not everything that can be measured counts.” No truer words have ever been said for marketers to abide by in today’s business environment.
