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Highlights from Mary Meeker's Annual Report
By: Danny Flamberg
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Every year we anticipate Mary Meeker’s wide-angle view of all things digital. Mary, widely considered the ultimate prescient observer of the Internet and all things digital, and her colleagues at Kleiner Perkins, are known for aggregating and analyzing a vast array of the latest data from multiple sources and for contextualizing what they find in terms of social, cultural, economic and political trends. 
 
Generally considered the most comprehensive view of what’s going on and an insightful forecast of where we are heading, the latest installment arrived at the tail end of May. You can access the full report, all 294 slides, at www.kpcb.com/internet-trends.
 
Here are 7 highlights for marketers gently interpreted.
 
We’re Online but Growth Is Slowing. Half the population of the earth, 3.6 billion individuals, is online. In the US, we’re logged-in, on average, 5.9 hours each day; half of which is via a mobile device. Future expansion is about Internet penetration in developing countries.
 
It’s a Mobile World. Mobile devices have better functionality, larger access to Wi-Fi and are generally easier to use. On average, Americans are watching videos on mobile devices more than 30 minutes each day. The pace of smartphone and tablet turnover and replacement is slowing since almost everyone has one and prices are steadily rising.  
 
eCommerce Is Growing & Evolving. With 600,000 online merchants doing $20 billion in gross merchandise value, eCommerce now represents 13% of all retail sales. Amazon dominates the space. It commands 49% of all initial product searches, 10 percent more than Google. But both Google and Facebook are developing parallel, integrated end-to-end solutions to compete more effectively. All three are generating significant advertising revenues from smaller merchants using their platforms. Significant growth will depend on solving issues with payment, fraud, personalization, delivery and customer service.
 
Social Media Is Driving eCommerce.Social referrals are now 6% of traffic to eCommerce sites. Eleven percent of shoppers coming from social media buy immediately. Forty-four percent close the sale later indicating that 55% of socially referred shoppers turn into revenue. Facebook, Instagram, Pinterest, Twitter, and Snapchat are the referral leaders. 
 
Internet Advertising Is Growing. With 20 percent year over year growth, driven mostly by mobile, and executed mostly through programmatic buying, marketers are still bullish about online ads. The leading platforms garner the most revenues as marketers try to shift consumers from one-time buys to on-going subscriptions and find the right persuasive balance between content and ads. Brand safety and lingering doubts about bot fraud will impact growth. trajectory. 
 
Data Is a Doubled-Edged Sword. The volume of data collected, 12 zettabytes/year in 2015, is astounding and growing exponentially. Only 9 percent is structured which guarantees job security for analysts and data scientists as they apply artificial intelligence and machine learning to make sense of the growing data flow, identify meaningful patterns and optimize relevance and targeting. Faster computing, cloud storage, and advanced analytics make managing and interrogating huge data sets easier and more widely accessible. The competition in AI and ML is on and getting more intense between the US and China. Data is a paradox since it can be used to personalize, predict and target customers in ways that super-serve them. Conversely, it can easily be used to invade individual privacy.
 
US Consumers Are Dog-Paddling. Stagnant wages and rising costs are squeezing American consumers. As the cost of essentials like shelter, transportation and healthcare rise, discretionary spending decreases. Fluctuations in the price of gas, food and other staples limit spending. The squeeze on income makes the value proposition of disruptors like Uber, Airbnb or Etsy attractive to both buyers and sellers.
 
Mary’s data confirms many of the trends we are experiencing in the market. In some cases, the data points to a broader context. In other cases, the collected data points get us thinking about the future in different directions.


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About the Author
Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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