Internet engagement continues to rise

Mobile devices are the best bet to gain the attention of the online consumer.

We're barely into the first generation of the Internet, but take a look of some of these figures and consider how formidable the online community has grown in just the past two decades:

  • There are 2.8 billion users of the Internet as of 2014, up from 35 million in 1995.
  • Put that number in context to see what a revolution the Internet is: Just 0.06 percent of the world's population was online 20 years ago. That number has grown to almost 40 percent by 2014.
  • There are currently 5.2 billion mobile phone users today. That's up from 80 million in 1995.
  • To put that number in context, that's almost three-quarters of the world's population vs. only 1 percent in 1995.

With the number of people online skyrocketing,  it’s no surprise to learn how large many of the world’s Internet companies have grown. 
In 2015, the market capitalization of the top 15 Internet companies was a combined $2.4 trillion, up from $16.8 billion in 1995.

At the top of the heap in 1995 was Netscape with a market cap of $5.4 billion. As of May, Apple was No. 1 with a market cap of $763 billion. (Considering the fortunes of Netscape, staking a claim on the Internet is no sure bet to fame and fortune. Apple, for example, is the only company on the 1995 list to be included on the 2015 list, growing from a relatively modest-sounding market cap of just under $4 billion in 1995.)

These figures come from an annual presentation on the Internet marketplace done every year since 2001 by Mary Meeker, a former Wall Street analyst turned venture capitalist at Kleiner Perkins Caufield & Byers. Her firm is a legendary early investor in many name brand Internet and other technology firms. Firms such Amazon, Google and Intuit are just a few of the companies that that got their starts with an investment from Kleiner Perkins. Meeker, herself, is just as legendary for her Internet Trends report, which The New York Times refers to as the Farmer's Almanac for the tech industry. Each year she trots out a PowerPoint presentation with this year's talk including more than 200 slides.

Since Phc News was wrapping up its own Internet Survey, we thought we would include a summary of Meeker’s report to give us a macro view of where we all fit into the Internet. Overall, Meeker's report card this year shows the growth of the Internet actually taking a breather. But, most any business would still be envious of such a “slowdown.” For example, the Internet's user year-to-year growth rate in 2014 was 8 percent vs. 10 percent in 2013. Likewise, growth in smartphone subscriptions grew 23 percent in 2014 vs. 27 percent in 2013. Meanwhile, Internet traffic grew 21 percent in 2014 vs. 24 percent in 2013. 

Mobile, mobile, mobile

The main plot for the last few of Meeker’s reports is clearly on the growth of mobile. Global mobile data traffic – in other words, what we are all reading on our smartphones, tablets or any other device that’s not bound to a desk – was up 69 percent year-over-year in 2014. Impressed? Then consider it was up 81 percent in 2013 and 57 percent in 2012.

Meeker added that her 2015 projections show that we are spending 5.6 hours a day perusing digital media with a majority at 51 percent spent doing so on mobile devices. Also, mobile video is an ever-increasing segment of video viewing. For example, video accounted for 64 percent of consumer Internet traffic in 2014 and 55 percent of mobile traffic. Facebook now gets 4 billion video views per day, up four times in six months.

Want to advertise to attract customers? Consider mobile advertising. Meeker pegs the size of total dollars spent on Internet advertising to be $50 billion. But she sees a huge potential for dollars spent on mobile. Here’s why: According to her calculations, mobile only garners 8 percent of the total Internet ad spend. Yet Meeker says there’s a huge disparity between the money spent on mobile ads and the time spent looking for information on their mobile devices. 

Meeker has long been bullish on mobile ad growth and believes there’s a $25 billion opportunity for mobile ad spend in the U.S. if markets ever decided to close the gap relative to how much time consumers spend on their devices. On a related note, Meeker says a promising up-and-coming feature is “buy buttons,” allowing direct purchase from places like Google, Facebook and Twitter.

“We’ll look back two years from now and be surprised about just how pervasive they’ve become,” she added.

In other developments, Meeker says many Internet users are, basically, reinventing the Internet, by sharing user-generated content on social platforms such as Facebook and Snapchat. She expects this trend is only going to expand, and is already gaining speed in consumer reviews and news. Finally, while a bunch of 18-year-olds might not be your customers today, they will be some day. Anyone wanting to gain the attention of this youngest of today’s millennials better do it through mobile.

It’s easy to see how obsequious the devices are to this set. For example, 87 percent of millennials say their smartphones “never leaves their side.” 
Eight of 10 agreed with the statement, “When I wake up, the first thing I do is reach for my smartphone.” 

And while there’s plenty that can be done through a mobile device already, 60 percent say that “everything” will be done on mobile devices in the next five years. 

(NOTE: Click here for to see the infographic in the July digitial edition of PHC News!)

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