The best Meeker 2017 Internet Trends slides and what they mean

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The best Meeker 2017 Internet Trends slides and what they mean

Here are the must-read stats about what’s happening with internet adoption, smartphones, ads, e-commerce, entertainment, gaming, enterprise healthcare, China, India and startups. We’ve picked the most important slides from legendary Kleiner Perkins partner Mary Meeker’s massive 355-page 2017 Internet Trends report, deciphered the complex data and explained why they’re important.

Click or scroll through the slides to see the Internet Trends highlights, and read the full-report here.

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Smartphone Sales Growth Slowing

Global smartphone shipments grew just 3 percent this year compared to 10 percent the previous year.

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Global Internet User Growth Flat

Total internet users grew 10 percent this year, the same as last year, showing steady progress is accessibility.

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Smartphones hitting saturation

Smartphone shipment growth has dramatically declined since 2014 to just 3 percent this year, indicating that almost everyone who wants or needs a smartphone now has one.

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Mobile Pushes Steady Internet Usage Growth

U.S. adults now spend over 5.6 hours per day on the internet, including over 3 hours per day on mobile compared to under 1 hour per day in 2011. Yet desktop usage has only declined slightly, indicating it’s more of an addition of mobile than a shift to mobile.

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Mobile Ad Dollars Now Exceed Desktop

While total online ad spend is growing steadily, mobile has now overtaken the desktop in ad dollars just like it has with usage time.

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There Should Be More Ad Spend On Mobile

People spend 28 percent of their media time on mobile yet it only receives 21 percent of ad spend, indicating there’s a $16 billion opportunity for more mobile ads.

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Ad Spend On Internet Will Soon Surpass TV

Within six months, dollars spent on internet ads should eclipse dollars spent on television, indicating a huge opportunity for mobile products to soak up this shift.

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The Ad Duopoly

Google and Facebook control 85 percent of the growth in online ads and their share keeps increasing. Since more data and impressions keep helping these companies improve their targeting, it could become harder and harder for other platforms to compete.

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Mobile Ad-Blocking Skyrockets

In developing markets where data costs can be high, users are increasingly blocking ads whenever they can. Nearly 400 million people around the world block mobile ads.

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Advertisers Demand Better Targeting And Measurement

Big platforms like Facebook, Google and Snap are responding to advertisers seeking to prove return on investment on their ad spend by improving ad targeting relevance, and measurement of what works.

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Google, Pinterest, Facebook Try To Drive Purchases

Big platforms are using increasing willingness to buy online to earn revenue through ads for products.

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Hyper-Local Ads Drive Foot Traffic

Google, Nextdoor, Foursquare and Uber’s location-aware ads that appear when users are near a store can effectively influence purchases.

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Ads Targeted By Your Images

Following Google’s success with AdWords based on what you type, Snap is succeeding with ads based on the images you share.

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User- And Influencer-Generated Content Make Great Ads

Ads repurposed from content shared by users or social media influencers can perform much better than content created by stodgy brands.

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Ads Based On What You’re Looking At

Image recognition and camera apps will allow ad platforms to know what you’re looking at and serve you more relevant ads.

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Here Comes Voice Search

As voice recognition accuracy improves, 20 percent of mobile searches are now made with voice, while voice devices like the Amazon Echo are exploding in popularity and breadth, with 11 million Echos installed in the U.S.

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Customer Service Is Shifting To Chat

There’s a rapid rise in the percentage of customer service conversations happening via real-time online chat instead of phones, as users demand faster response times and wider access.

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Direct-To-Consumer Brands With Less Choice

By focusing on community, content marketing or a narrow selection of great products, new brands are disrupting old industries in pet care, beauty, shoes and more.

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E-commerce Shipping More Packages

Amazon Prime and other online retailers have caused the package and parcel shipping volume to grow 9 percent this year.

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Food Delivery Skyrocketing

Convenient delivery services have grown the percent of revenue from delivery for some restaurants, while personalized grocery delivery from Instacart saves people tons of time.

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Amazon Is Killing Retail Chains

Online shopping and Amazon’s quick delivery are causing closures of many locations for stores like RadioShack, Michael Kors, Payless shoes, Sears, Macy’s, The Limited, American Apparel, GameStop and CVS.

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Wal-Mart Tries To Compete With Amazon

Wal-Mart is trying to back up its massive physical footprint with better online shopping by buying Jet, but Amazon has become the leading online seller for baby wipes and batteries.

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Bleak For Brick-And-Mortar

Commerce grew 15 percent this year in the U.S., and that rate keeps increasing thanks in part to Amazon’s optimization.

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Gaming Goes Mainstream

There are 2.6 billion quarterly video gamers now compared to 100 million in 1995, thanks to massive multiplayer online games, the popularity of e-sports and an increase in casual female gamers and average gamer age. Games now earn $100 billion per year, up 9 percent this year.

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Gaming Teaches Fundamental Skills

The challenge and incentives of gaming can teach people trial and error, puzzle solving, workflow, project completion, ongoing progress measurement, exploration, rules and consequences, collaboration, observation, analysis and story telling.

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Gaming Is Addicting

Video games soak up more daily minutes than Facebook, with top developers like Candy Crush-maker King using purposefully addicting game design.

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Gaming Can Improve Real-World Performance

VR training, machine learning-analyzed footage, video game simulations and workout equipment connected to games can help athletes improve.

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Gamification Slips Into All Apps

By making everything from language learning to dating to personal finance into a game, people stay more engaged.

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Data Created Per Year Is Up 10%

Humans created roughly 14 zettabytes of information in 2016, or 14 trillion gigabytes, and the growth rate will keep increasing.

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E-sports Popularity Is Exploding

E-sports viewing time was up 40 percent year over year, while 43 million people watched the League of Legends finals, prize money is growing, media and sports companies are buying franchises and rights and an equal number of millennials strongly prefer e-sports over traditional sports.

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Free Trials Drive Streaming Music Subscriptions

Services like Spotify and Apple Music are converting people into paid subscribers through ad-supported tiers and free trials, while new music discovery where Spotify excels is of top importance.

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Expensive Cable Causes Cord-Cutting

The high cost of a cable subscription and the prevalent usage of online streaming platforms is causing people to ditch television.

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Recorded Music Revenue Finally Growing Thanks To Streaming

After 16 years of decline, revenue from streaming services led by Spotify’s 50 million subscribers surpassed that of physical media sales to get recorded music revenue growing again.

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Netflix Is Slowly Dragging Down Television

Netflix grew 6.7X to roughly 175 billion monthly minutes of video delivered per month since 2010, while the top TV networks declined an average of 10 percent. Netflix has grown to 30 percent of home entertainment revenue, but still earns much less per user than TV, indicating room to grow revenue per user as people cut the cord.

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YouTube Loses Mobile Video Share As Facebook And Snap Grow

Social media apps with their conveniently short content and serendipitous discovery are driving mobile video growth.

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Cloud Spending Nears Data Center Spending

Amazon’s AWS, Azure and Google Cloud are driving cloud spending growth as clients seek compliance, governance and the ability to change vendors. This opens the door for APIs and browser extensions, containers, analytical databases and edge computing.

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Enterprise Starts Caring About Design

The ratio of designers to developers at enterprise companies is increasing as consumer tech teaches people to expect better interfaces.

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Malicious Attachment Spam Skyrockets

The growth of the cloud creates new security concerns, and spammers are using malicious attachments and phishing to attack, leading to a rapid rise in data breaches with over 100 million identities exposed.

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Tech Drives Wealth Creation In China

As China’s consumer confidence grows, the service sector expands and non-state-owned enterprises thrive, technology companies are pushing public wealth creation now compared to consumer staples and healthcare in 2005.

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China Hits 700 Million Mobile Users

The China mobile user growth rate grew slightly, and is still strong at 12 percent compared to the 3 percent global average, indicating there are plenty of new Chinese mobile users still to come.

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Mobile Drives Chinese Media Consumption

Mobile usage surpassed television viewing in China in 2016, with WeChat dominating time spent on the internet.

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China Pays For Live Streaming

China surpassed the U.S. as the top interactive game market in 2016 thanks to love of online battle arenas and role-playing games, but the big differentiation in entertainment payments is that the Chinese pay tips and expensive virtual goods to interact with their favorite live streaming stars.

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China Leads On-Demand Transport As Bike Sharing Skyrockets

China now sees more on-demand car and bike trips than all other countries combined, with cars handling distance and bikes handling last-mile. Ubiquitous, cheap, convenient-to-rent bike sharing has led to staggering 100 percent month over month increases in bike sharing, to over 20 million users, which drives C02 emission reduction.

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AliPay And WeChat Drive 2X Increase In Chinese Mobile Payments

The Chinese are rapidly replacing cash and bank cards with mobile payments for smaller transactions like bike sharing, street food, mobile top-ups and live streaming tips. Mobile payments are causing Chinese tech giants to diversify into financial services.

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Mobile E-commerce Drive Rapid Shift From Brick-And-Mortar

Commerce grew 24 percent in China this year compared to 15 percent in the U.S., as China shifts to online shopping faster than other countries, led by giants like Alibaba with 570 million mobile monthly users.

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News feeds Drive 30% Chinese Ad Revenue Growth

Thanks to algorithmically sorted news feeds from Toutiao, Baidu, Weibo and Tencent, news feed ad revenue grew roughly 70 percent this year.

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Declining Data Cost Drives India Internet Adoption

India, the fastest growing large economy, saw internet user count grow 28 percent this year to 355 million — second behind China. While the price of smartphones is still prohibitively high at 8 percent of average annual GDP per capita, data cost has dropped from 3 percent to 1.3 percent since 2015, allowing more people to afford using a phone more.

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Intense Competition In India Reduces Prices

Competition from Chinese hardware makers, Indian carriers like fast-rising Jio and e-commerce players from all over is benefiting customers, as are Prime Minister Modi’s banking, power, broadband and startup initiatives.

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Tech Is Improving Healthcare

New inputs like 3D scans and wearable devices, data monitoring, willingness to share health data, new health apps, electronic health record adoption and a rise in medical research will improve care accuracy.

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Entering The Age Of Genomics

The time and cost of sequencing a human genome have dropped faster than Moore’s Law, leading to a massive increase in genomic knowledge and access to personalized medicine.

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Internet Companies Rule Public Markets

Tech giants like Apple, Google, Microsoft, Amazon, Facebook, Tencent and Alibaba mostly grew their leads this year, with all of the top 5 of the top market cap companies coming from tech, compared to just 40 percent in 2012.

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Tech Giants Expand And Converge

While the top internet companies all started in different industries, many are now attacking each other for control of big markets like e-commerce, messaging, hardware and advertising.

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Tech Companies Stay Private

The vast majority of money invested in tech now comes from the private markets outside the occasional blockbuster IPO.

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Acquisitions Popular Lately

Though acquisition dollars decreased slightly in 2016, deal count grew and the total spent on these deals remains high compared to a few years ago, indicating there hasn’t been any big bubble burst.

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Immigrants Create Jobs

Of the most highly valued tech companies in the U.S., 60 percent were founded by first or second generation Americans, and created 1.5 million jobs, while in the private markets, 50 percent of the highest valued startups were created by first generation immigrants.

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