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The ‘Queen of the Internet’ on digital ad spend, high customer acquisition costs and more

The Drum 12 Jun 2019 07:09
Google is still dominating ad spend, but challengers are experiencing faster growth

The renown “Queen of the Internet” has released her 330-plus page industry report for all her data-loving subjects to enjoy.

Mary Meeker, founder of Bond Capital and former Kleiner Perkins general partner, shared her annual Internet Trends Report on Tuesday at Vox/Recode’s Code Conference.

The Drum has pulled together key advertising and marketing trends from the report. (The full report can be found here.)

Slowly emerging duopoly challengers

Internet ad spending accelerated by 22% in 2018, but internet ad revenue coming through leading platforms is decelerating.

Revenue coming through online platforms Google, Facebook, Twitter, Amazon, Snapchat and Pinterest slowed by about 9% in 2018 compared to the year prior.

Google and Facebook still lead, but challenger platforms are quickly rising, “though from a small base,” Meeker said. Amazon recently bought Sizmek’s ad server, though that may be in jeopardy.

The high cost of customer acquisition

However, Meeker’s report shows that CAC is climbing at an unsustainable level, as it’s outpacing customer lifetime value.

Digital media use climbing

As of 2019, Americans are now also spending more total time on mobile devices compared to televisions. Advertisers seem to have caught up to this trend, as mobile ad spend and time spent have reached equilibrium in 2018.

According to the report, a Pew Research study of US teens found that 42% experience offensive name calling, 32% experienced spreading of false rumors and 16% experienced physical threats.

Engagement on these platforms is changing, too, as image and video creation and sharing is ramping up. For example, more than half of impressions on Twitter come from rich media.

E-commerce now accounts for 15% of all retail sales. Even Instagram is bolstering its shoppability to combat any potential decline in social media usage.

Analytics and data optimization are central to driving growth, with Meeker saying that customers are still willing to share their information with retailers if they get something valuable in return.

To be determined

She did, however, highlight how OTT can change ad targeting, saying that digital-based TV ads aided by in-hand mobile devices could be the future of the TV viewing experience.

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