Every year, well-known industry analyst Mary Meeker (a partner at Kleiner Perkins Caulfield Byers) commands the attention of Silicon Valley and techies everywhere when she presents her legendary Internet Trends Report. Commonly referred to as the Internet State of the Union, this yearly flood of info, stats, and research is pretty important. This year’s report was posted on May 27 and it covers everything: basic internet usage stats, the commercial success of drones, the emerging mobile market in India, the love affair between millennials and their phones, the rise of vertical video, and much more.
Since the presentation itself is a doozy at 196 slides (32 more than last year!), we’ve pared it down to the juiciest takeaways and stats. If you ever find yourself with some extra time though, the full presentation (embedded at the bottom of this post) is packed with great information.
Here’s what you need to know:
- The World Is Online: 39% of the world is now on the internet (2.8 billion people), and there’s more coming. Google and Facebook both have projects underway that aim to give internet access to those in developing countries.
- Internet and Mobile User Growth Rates Are Slowing: Global internet user and smartphone user rates are still increasing, but at a slower pace than before. In 2014, internet user rates grew 8% compared to 10% the year before, while smartphone user growth was up 23% in 2014 compared to 27% the year before. India, China, and Brazil are seeing the strongest smartphone growth and Meeker predicts that mobile-first content and apps built for these growing markets will bring big profits.
- Millennials REALLY Like Smartphones: This one probably isn’t a surprise to anyone. When surveyed about their smartphones, 87% of millennials said, “My smartphone never leaves my side, night or day,” and 80% said, “When I wake up, the first thing I do is reach for my smartphone.” Sounds like a committed relationship!
- We Use Our Phones a Lot: The average American adult now spends 5.6 hours on the internet everyday and that’s up from 5.3 hours last year! We’re also spending more time on our phones than other devices. While we spent 2.3 hours on both computers and phones in 2013, we now spend 2.8 hours on our phones compared to only 2.4 hours on computers. That’s a LOT of mobile user engagement waiting to happen. Which brings us to our next point:
- We’re Still Not Utilizing Mobile Ad Spend to Its Fullest Potential: Back in 2014, Meeker said mobile advertising spend was being underutilized while too much money was being spent on print advertising. This year she echoed the same. While print ads get 18% of total ad spend, they only account for 4% of media consumption time. On the other hand, mobile accounts for an ever-increasing 24% of media consumption time, but only gets 8% ($13 billion) of total ad spend. Since the internet accounts for the same amount of media consumption time (24%) and gets 23%, or $50 billion of ad spend, Meeker sees a $25 billion opportunity for mobile ad spend being wasted. Unless the ad spend for print is justified by excellent performance, Meeker is right about the untapped potential of mobile ad spend.
- It’s Time to Go Vertical: Meeker found that vertical video ads—like those you watch on Snapchat—were watched in their entirety 9x more than landscape video ads. If video is your medium of choice, this is something you should note.
- We Like Talking to People on Dozens of Platforms: Who said the internet and smartphones were killing human connection? If anything, they’re enabling it like never before. Meeker found that much like last year, messaging apps such as Facebook Messenger, Snapchat, and WhatsApp are reigning as the top apps for usage and sessions. Why talk on the phone when you can message someone the same gif on six different apps?
- (User Generated) Content Is King: We all like watching what other people are doing, according to the runaway popularity of streaming and content creation platforms such as Twitch, Pinterest, and Snapchat. Pinterest pin creation is up 75% from 2014 to 2015, Twitch broadcasts are up 83% year over year, and 65% of Snapchat’s 100 million daily users are creating content daily. That’s a lot of snaps!
- (Visual) Content Is King: Teens and young adults in the 12-24 category are preferring visual social media platforms such as Snapchat and Instagram over platforms like Facebook and Twitter. From 2014 to 2015, Facebook usage decreased from 80% of millennials using it to 74%, Twitter usage is down from 36% to 32%, Snapchat is up from 46% to 57% and Instagram is up from 53% to 59%.
- Attack of the Drones: The drone commercial market has taken off (how many bad drone jokes can be made in one paragraph?), growing 167% in 2014 to 4.3 million units and $1.7 billion. Compare that to last year, when the market was $645 million and people were still trying to figure out how they felt about buying them. We predict that this market will continue to grow and create booming profits for commercial drone companies in the months and years to come.
Whew! That’s a lot of information, and that barely even covers 10% of the presentation. So what’s our main takeaway? Millennials, preferences for visual content, and developing markets like India and China are driving the future of internet and mobile growth. Since mobile phones are easier to access than the internet (5.2 billion people have a phone, 2.8 billion have the internet!), we’re globally becoming a mobile-driven society. That means a lot of room for mobile innovation for all parts of the world, so be sure to take advantage of this opportunity in your own industry.
What were your takeaways from the Internet Trends Report? Tell us in the comments below!