Bond Internet Trends

Americans are spending a nearly obsessive amount of time with digital media, according to the highly anticipated, just released annual Internet Trends Report from Mary Meeker, a general partner at venture capital firm Bond Capital. In 2018, consumers logged 6.3 hours a day online, up 7% from the year before. Most of that growth is coming from mobile and other connected devices, as time spent on computers declines.

Meeker’s 333-page study, deemed the “most highly anticipated slide deck in Silicon Valley” by Recode, was presented this week at Code Conference 2019, and exhaustively surveys trends pertaining to the internet and other forms of media.

First things first: The report does touch on radio, in a slide that compares the percentage of time spent with various media, vs. the percentage of advertising spending on the platform—and there is an obvious disconnect. While ad spending on television, mobile and desktop is commensurate with usage at 34%, 33% and 18%, respectively, the radio captures 12% of all time spent among media, and yet commands only 8% of the advertising spend. Print, on the other hand, has only 3% of usage, with 7% of the marketing spend, according to the report, as analyzed by Inside Radio.

Returning to the ubiquity of the online realm: Today, 51% of the world – or 3.8 billion people — are internet users, up from 49% (3.6 billion) in 2017. The top nations for usage: China, India, the U.S., Indonesia and Brazil. Growth slowed to 6% in 2018 because so many are already online that new users are becoming more and more scarce. Similarly, sales of smartphones, the primary internet access point for many people across the globe, are declining because of their ubiquity.

Consumers acknowledge that they may be spending too much time online, with more than 25% admitting they are “almost constantly online.” Meeker writes, “Consumers are aware of concerns about Internet usage overload and are taking steps to reduce usage. Leading USA-based internet platforms have rolled out tools to help monitor usage. Social media usage growth appears to be decelerating following a period of strong growth. Privacy and problematic content concerns are also top-of-mind and are following similar patterns.”

In fact, as privacy becomes a bigger issue, expect more options to make online communications safe. In Q1, 87% of global web traffic was encrypted, up from 53% three years ago, the report notes. The reasoning: “The internet will become more of a cesspool: Getting rid of problematic content becomes more difficult on a large scale, and the very nature of internet communication allows that content to be amplified much more than before,” the Internet Trends Report concludes. Among issues: 42% of U.S. teens say they have experienced offensive name-calling online, terrorists are being radicalized on sites like YouTube, and social media has encouraged increased political polarization.

Referring to “The Constant Consumer,” the report points out that people “increasingly live in a state of constant digital connectivity, a societal shift that will change the nature of retail and commerce and present new opportunities for social media companies, brands and advertisers.” Further, “Being online is increasingly becoming our default state of existence. Even when we're not spending dedicated time with digital media, we fill many of our in-between moments by absent-mindedly checking our phones and refreshing our feeds.”

As a result, Meeker says, “We are now almost constantly vulnerable to distraction by apps and services, which means we are almost constantly vulnerable to the commercial opportunities presented by brands, advertisers or the apps and services.”

Market Share Leaders: Tech, Tech & Tech

Looking at global market capitalization leaders, seven of the top 10 are tech companies, with only Berkshire Hathaway, Visa, and Johnson & Johnson commanding a top share outside of the technology realm. Leading the way are: Microsoft, Amazon, Apple, Alphabet, Berkshire Hathaway, Facebook, Alibaba, Tencent, Visa and Johnson & Johnson.

Here’s an interesting stat: Of the top 25 most valuable tech companies, 60% were founded by first- or second-generation immigrants. They employed 1.9 million people last year. “New stricter immigration laws could negatively impact the tech industry and perhaps prevent our next Elon Musk from getting to the U.S.,” the report posits.

Internet ad spending accelerated in the U.S., up 22% in 2018. Most of the spending is still on Google and Facebook, but companies like Amazon and Twitter are growing their shares. Some 62% of all digital display ad buying is for programmatic ads, which will continue to grow.

E-commerce now holds 15% of retail sales. Its growth has slowed — up 12.4% in Q1 compared with a year earlier — but it still towers over growth in regular retail, which was just 2% in Q1, the Recode synopsis notes.

Meeker writes that it's “possible to imagine a not-too-distant future where the lines between digital media engagement and ecommerce are effectively erased. In this future, users will no longer differentiate between ‘being online’ and ‘shopping online.’ The two will simply converge, so that shopping — or at least browsing for goods and services — becomes an integral part of the digital media experience.”