Internet & new technology analyst Mary Meeker has been known for her industry-leading work around online growth & investment opportunities since 1998, when Google was in Beta and looked like this:
Currently in a venture capitalist role at the Kleiner Perkins Caufield & Buyers firm, her latest Internet Trends report was recently delivered and there are plenty of precious nuggets of wisdom we think are relevant to the Australian market. Here are 3 (of many) of Meeker’s key observations we feel are salient to current local industry conversations:
1. Mobile usage vs total web usage is growing… But is it cannibalising PC usage, or creating incremental time spent online in Australia?
Globally, the percentage of page views coming from mobile devices is 25% in 2014, up from 14% in 2013:
The corresponding shift in advertising spend is rather incongruent. In the US, for example, mobile accounts for 20% of total media consumption time with only 4% of advertising budget being invested into the channel. Although many advertisers and agencies are recognising this imbalance, the question remains as to whether a greater mobile investment ought to be at the expense of prevailing desktop/PC budget, or whether it should be supplemented by wider marketing allocations.
One way of exploring this is to measure the fluctuations in average daily users over time across PC and mobile devices:
With both mobile and tablet activity increasing, and PC activity remaining steady, it suggests that Australian consumers are not sacrificing good old PC time to make way for greater mobile and tablet usage. It follows that advertisers need to look beyond traditional digital budgets to capitalise on the significant mobile opportunity on the table.
(As a side note: marketing in media silos in this way, while widely regarded as passé, remains an inherited factor to be addressed by brands and agencies).
2. Digital music streams are up, but digital track sales have suffered their first YOY decline (US)
Music streaming services have proliferated in the Australian market in the last year – and if we follow our US counterparts, this new way of listening to music is here to stay. This new model has been driven by Millennials, both in terms of the industry circumventing music piracy, but also by this audience’s pure utilitarianism & lesser need to ‘own’ music. Indeed, we’ve seen a 27% increase in the number of people streaming music in Australia from 2012 to 2013 compared to only an 8% increase in digital album sales revenue and a 26% decrease in physical sales.
The result is a confusing abundance of music streaming services launching in our local market in the past 2-3 years:
With front runners Spotify (1.1 million monthly active members) and Pandora (700,000 monthly active members) now delivering significant scale, it’s again the role of advertisers and agencies to capitalise on the opportunity and understand the role of music streaming as a channel (i.e. am I a radio ad, or something more?)
Some great examples of brands using music streaming as something more than a natural extension of radio are those integrating with streaming services’ APIs. Reebok was one of the earlier but most effective examples of this, with the Reebok FitList app being enabled by their Spotify partnership:
This provided a relevant and useful tool to Reebok’s fitness audience, and leveraged the true value and functionality of the platform rather than its audio ad potential alone.
3. YouTube continues to see strong growth as a favoured online video platform, however is TrueView video marketing the optimal format?
Meeker attributes YouTube’s continued growth to the large volume of new channels being created and consumed on mobile devices, which are going through early stage rapid unit growth (particularly tablets). However, her favourable reference to the skippable, ‘cost-per-view’ TrueView video ad format is something currently being challenged in the Australian market. While many agree that being able to skip ads before short-form content respects user experience, marketers also need to achieve positive ROI within this format.
One example of this is Tube Mogul’s Engage-to-Skip product, which maintains the user’s ability to skip to the content but requires them to make a simple brand engagement before doing so:
Uptake for this format is not yet mainstream, however it’s a good example of a brand trying not to disregard user experience in the quest for driving advertising ROI. We can see this ‘Vote for your Favourite’ functionality working well for most categories – although it may be a challenge for some (Life Insurance and Adult Diapers immediately come to mind). Nevertheless, we love the idea of using this data to then serve a more desirable video ad to engagers.
This is really the tip of the iceberg in terms of the trends Meeker covered, which gravitated around the ‘Re-imagining’ of experiences now heavily influenced by new technology. Whilst many of her insights are global or US-centric, we definitely think it’s worth reading in full because this lady really knows her stuff!