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In many ways, China is competing with the Silicon Valley, Snapchat is the future of advertising and Big Data is becoming an important debate
It is a report without an overarching theme or hypothesis.
Which may be the reason the annual project by Mary Meeker, a Venture Partner at Kleiner Perkins Claufield Byers, receives enough attention in the Silicon Valley to convince outsiders her surname is Rowling.
The report brilliantly lifts itself above specific verticals and offers a wide-range of information which can be interpreted and implemented into a variety of different business sectors.
Check out the full Internet Trends Report 2016, here.
We have gone through the report and present three takeaways (and one random thought) that were particularly intriguing for e27.
China is forcing the Silicon Valley to take notice
The report, as one would predict, has an American-centric tilt. Making it especially noteworthy that a significant chunk is dedicated to another country: China.
Highlighting a growing embrace of ‘tertiary-level’ jobs (real-estate, finance, culture, education and other jobs requiring significant schooling), employment in the services sector is growing rapidly.
As one would expect in a maturing economy, while the year-on-year growth of urban disposable income is tanking; the total amount is nearly US$2,000 more per person than it was just 5 years ago (just under US$3,000 in 2010 compared with a bit less than US$5,000 in 2015).
In 2016 China, one result has been the dominance of e-commerce in the retail sector. Unlike the US — an economy of comparable size — the top two retailers by revenue in China are Internet companies, Alibaba and JD.com. Plus, there is a noticeable dropoff between JD.com and the top brick-and-mortar retailer China Resources.
In the US, Amazon (which makes similar, but less, revenue than Alibaba) is the fifth most popular retailer behind Walgreens, Kroger, CVS and Wal-Mart. Furthermore, there is a huge gap between Amazon and Wal-Mart.
This being said, a closer look at total revenue shows Alibaba would be in the 5-6 range and JD.com would not make the US list.
As readers of e27 would expect, WeChat is wildly important for these e-commerce trends as 31 per cent of consumers make purchases through the messaging service.
Zooming out, total mobile payments in China already are far more social and active than their American counterparts. And while the graph below is meant to compare US and Chinese payments, it also shows that Alibaba’s Alipay is, to be blunt, getting completely dominated by WeChat.
The report also highlighted travel apps, Ant Financial and the on-demand economy as services or sectors that compete, or surpass, their Silicon Valley equivalents.
Get on Snapchat. Immediately.
While we picked out the China data for our readers, the winner of the report was Snapchat.
The social media company has long shed its reputation as a sexting app and has already wrestled the ‘company most likely to challenge Facebook’ moniker away from Twitter. Now, if the company continues on its current trajectory, it is projected to be one of the important advertising channels in the near future.
Keep in mind, many of the numbers are statistics from the US, but the trends are applicable to much of the global economy.
The graph below is the big one. It shows that in legacy media (television, radio, print) and even the Internet, ad-spend is about equivalent to the total amount users spend engaging with the medium.
Mobile is the exception.
Mobile has a 13 per cent gap (so people spend far more time on their device in comparison to average ad-spend allotment). In the US, the report projects a US$22 billion opportunity.
Furthermore, the report says nobody has found the ‘secret recipe’ for successful video marketing. The most successful ‘campaign’ in 2016 was an average woman in her car wearing a Chewbacca mask — and Kohl’s certainly had no idea it was even happening.
The Meeker report says people want videos that are:
1) Authentic
2) Entertaining
3) Evoke Emotion
4) Personal / Relatable
5) Useful
6) Viewer Control
7) Work with Sound Off
8) Non-Interruptive Ad Format
Sounds like Snapchat (and Instagram) doesn’t it?
Well, for Millennials at least, the data backs it up. Facebook is the outlier (and is more than just a video platform), but of the video/photo centric companies listed, Snapchat and Instagram (yes, we know it is owned by Facebook), also have the best engagement statistics.
Instagram has a higher reach, but outside of Facebook, Snapchat has the highest ‘average monthly minutes per visitor’ of the listed social media companies.
To drive the point home, check out the ‘daily video views’ statistic below. Both Snapchat and Facebook are growing fast, but in Q1 2016, Snapchat averaged about two more ‘video views per user per day’ than Facebook.
But that is the future, and today Google is still the most important company for online advertising (far outstripping the categories ‘other’ and ‘Facebook’) and generates nearly US$30 billion in annual revenue. Facebook is growing faster (59 per cent year-on-year) and generated about US$7 billion in ad revenue in 2015.
So, stay on Google and Facebook, but add Snapchat to the mix.
Data is king, but comes with privacy concerns
Similar to the explosion of silicon chips from decades ago, Big Data technology is becoming exponentially more powerful and significantly less expensive.
Data generating tools are increasing rapidly and it is no longer simply a desktop and the Internet generating data. Cars, video games, social media, scientific equipment, wearables, smart homes and drones are all equally as important for the data they generate as the actual function they perform.
Meekly says ‘The Next Big Wave’ in data is, ideally:
“Leveraging this unlimited connectivity & storage to collect / aggregate / correlate / interpret all of this data to improve people’s lives & enable enterprises to operate more efficiently”
Like much of technology, the growth is in large part thanks to simplicity. It is worth checking out the various examples, but below is a visual of the difference the Datadog cloud monitoring platform made on visualising data points.
On the flip side, as the slides so aptly put, “As Data Explodes…Data Security Concerns Explode”.
Before diving in, it should be noted the average American values personal privacy and liberty above almost any other cultural value, so view the chart below through that lens.
From a survey of 2,000 respondents, a whopping 96 per cent of respondents said they were either ‘somewhat’ or ‘very’ concerned about personal data. Plus, 74 per cent of people said they limited online activity as a result of these concerns and 45 per cent are more worried than a year ago.
These aren’t tin-potted conspiracy theorists. Data gets stolen A LOT.
The Meekler report says 4 billion data records have been breached since 2013 and, in the chart below, the striped green portion is kind of incredible: 1.2 billion data records stolen by one Russian hacking firm names CyberVor in 2014 (as worrying as it is impressive).
Let’s finish with a quote from the report by Adam Ghetti, Founder & CEO Of Ionic Security. It does not have a clear answer but is an interesting thought experiment:
“In the tangible world, physical limitations prevent the broad abuse of the law…Should the same laws automatically apply to the digital world where a few lines of code can unlock someone’s entire life?”
Random thought
What’s going on Turkey?
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All photos courtesy of the Internet Trends Report 2016.
The post In the year’s most anticipated report, China, Snapchat and data analytics stand apart appeared first on e27.
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