Hail Mary

Murphys Law MeekerEvery year, Mary Meeker, an analyst (in the same way Michelangelo was a ‘painter’) at VC firm Kleiner, Perkins, Caufield, Byers, produces her Internet Trends report, looking at how the web and usage of it are evolving. And every year, the industry breathes a huge sigh of relief because it knows it can dine out on the data for the next 12 months.

It’s a wide-ranging study. This year’s, in addition to the web, covers off enterprise software, consumer spending categories, drones, and the evolution of work. There’s little, if any, original research in there, but what Meeker does brilliantly is to amalgamate data from myriad sources to present a comprehensive overview of the way things are, giving us a much better idea of the way they might be going forward.

The dawn of the web
Some of the most fascinating stats in this year’s report are in the early pages, where Meeker turns the clock back 19 years to 1995, comparing the way things were then to how they are now, or in 2014 at least.

Between the two dates, the number of internet users rose from 35m to 28bn, with China’s share of those users rising from zero per cent in 1995 to 23 per cent in 2014. During the same period, the number of mobile users rose from 80m to 5.2bn; in penetration terms, from 1 per cent to 73 per cent. Even in 2014, however, there were more feature phones (60 per cent) than smartphones (40 per cent).

There’s more good stuff on smartphone numbers later in the report, where Meeker reveals that China has the highest number of smartphone users (513m), followed by the US (204m), India (140m), Japan (104m), with Brazil in fifth on 96m. Despite having the largest absolute number of smartphone subscribers, China’s smartphone penetration is relatively low at 38 per cent, while India’s is even lower at just 11 per cent. Australia, has the highest smartphone penetration, incredibly, 100 per cent, followed by Saudi Arabia on 91 per cent, then Japan on 82 per cent, S. Korea on 80 per cent and the UK on 71 per cent.

There’s more interesting data around video, messaging and social. Meeker reveals that six out of the top 10 most used apps globally are messaging apps, and on video, that 50 per cent of Facebook’s DAUs (Daily Average Users) in the US watch one or more video per day. Video views per day in the US, quadrupled in six months, from 1bn in Q3 2014 to 4bn in Q1 2015. 75 per cent of these views took place on mobile devices.

64 per cent of consumer internet traffic was video content in 2014, while video accounted for 55 per cent of mobile traffic. Overall mobile data traffic was up by a massive 69 per cent in 2014, though not as much as the 81 per cent increase seen the previous year.

Social standing
Another section looks at the most important social networks for US teenagers. In the spring of 2013, Facebook ruled the roost with just over 30 per cent of the teens polled choosing it as their most important social outlet. Twitter was in second with just short of 30 per cent, with Instagram in third on around 18 per cent.

By Spring 2014, however, Instagram had moved into first place, with Twitter second and Facebook third and that remained the case in spring 2015, with Instagram on 32 per cent, Twitter on 24 per cent and Facebook on just 14 per cent. Snapchat was the only other social network in double figures on 13 per cent. Those rumours you hear about teenagers deserting Facebook in droves? Maybe you’d better start believing them.

The report also has a fresh take on the media time/money spent data. The figure everyone quotes for mobile is usually 16 per cent of a user’s time but only 1 per cent of media spend, which I think is a Flurry stat. Using data from the IAB and eMarketer, Meeker reports that in 2014 in the US, mobile accounted for 24 per cent of people’s time in media, but got just 8 per cent of the ad spend. The internet accounted for 24 per cent of media time and got 23 per cent of ad spend. The biggest winner was print, which accounted for just 4 per cent of people’s media time, but still got 18 per cent of ad spend, though that trend is unlikely to continue.

Media time
The report also looks at the time spent with different digital media by US consumers, and lays bare the shift away from desktop to mobile. In 2012, consumers spent 1.6 hours per day on their smartphone and 2.5 hours per day on their desktop or laptop. By 2013 it was 2.3 hours on each. In 2014, mobile overtook desktop, accounting for 2.6 hours compared the desktop’s 2.4, and this year to date, mobile stands on 2.8 hours per day, compared to 2.4 hours on desktop.

The report ends with a chart on the 2015 market capitalisation of the leading internet companies. Apple tops the list with a market cap of $764bn (£500bn). Google is second on $373bn; Alibaba third on $233bn; Facebook fourth on $226bn; and Amazon fifth on $199bn. Tencent and eBay also feature in the top 10, but Yahoo is in 12th on $41bn, Netflix 13th on $38bn, LinkedIn 14th on $25bn, while Twitter is 15th on $24bn.

In amongst all the data, Meeker finds room for a couple of general observations, one being that: “One of the things I have learned about effective decision making is that the best decisions are often made by diverse groups of people.” And another: ““Consumer expectation that they can get what they want with ease and speed will continue to rise.” And finally: “Users generating their content are recreating the internet.”

At 197 pages long, Meeker’s analysis is not for the faint-hearted, but if you want to know what’s going on out there in that great big digital world, and where future growth might come from, it’s well worth the time taken to read it. Which you can do here.