The release of Mary Meeker’s annual internet trends report is always highly anticipated. This year was no different. Many of the trends Meeker identified for 2019 can be traced to two factors: increased competition and new regulatory barriers.
For the first time, over half the world’s population is online with 3.8 billion internet users. Even though that number shows a growth of 6% YOY, it is slowing from previous years. And while internet advertising is still seeing growth and a viable innovative pace, the customer acquisition costs for some spaces are increasing to levels that may not be sustainable.
New laws and regulations about data privacy are affecting ad targeting and growth. The leading US platforms, like Google and Facebook, have seen slowed quarterly internet ad revenue, while smaller digital advertisers, e.g., Amazon, Twitter, Snap and Pinterest, have seen increased market share.
In light of increased data privacy regulations, private encrypted messaging is becoming more prevalent. Three years ago, only slightly over half (53%) of global web traffic was encrypted, but that percentage rose to 87% in Q1 2019. Facebook is moving its app collection to private encryption.
Even with data privacy regulations in place (with more regulations under consideration), there are still data sources available that are of use for businesses and consumers alike. Data is driving change and digital innovation, benefiting channels like video, voice technology and wearables (the number of wearables users has doubled over the past four years). The common link among these channels is mobile consumption. Even though the global sales growth of smartphones is declining, mobile occupies more of US consumers’ time (33%) and marketers’ ad spend (33%), just barely below TV (34% time spent and 34% ad spend).
An emerging disruptor cited by Meeker is Fortnite, the online video game. She sees the game’s “freemium” model and potential for a new social network as a notable example of the type of platform that will engage the Gen Z demographic.