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31 TECH MACRO TRENDS<br />
What Marketers Need<br />
to Know in 2014
INTRODUCTION<br />
In the last four years, we’ve seen tremendous upheavals<br />
in how we communicate through social channels and<br />
mobile devices, and seen how software has spread into<br />
every facet of our personal and professional lives.<br />
Technology is reshaping marketing, the enterprise, and<br />
the world.<br />
For marketers, these changes represent a massive<br />
opportunity to reach a bigger audience with more<br />
relevant messages than ever before. But in order to<br />
capitalize on these shifts, we must first understand<br />
them.<br />
In this report, Percolate covers today’s biggest<br />
technology macro trends and offer our perspective on<br />
what they mean for marketers in 2014 and beyond.
TABLE OF CONTENTS<br />
1. Global — the staggering adoption of mobile<br />
and internet technology across the planet.<br />
2. Mobile — why the smartphones and tablet<br />
revolution is still just beginning.<br />
3. Social — a look at the scale of modern social<br />
platforms and how they’re being used.<br />
4. Software Eating the World — how new<br />
apps are transforming every industry & sector.<br />
5. TV & Video — how streaming content is the<br />
new center of our media consumption.
Global
Global internet users<br />
reached 2.6B in 2013<br />
but growth has slowed<br />
to 9% from 11% in 2012.<br />
1<br />
United Nations / International Telecommunications Union, US Census Bureau, Euromonitor<br />
International.
WHY IT MATTERS<br />
About 40% of the global population<br />
now has some level of Internet<br />
connection, with most of that<br />
coming from developed nations.<br />
The opportunity ahead is going to<br />
be in emerging markets.
China boasts 550M<br />
internet users, with<br />
80% of those<br />
connected on mobile.<br />
2<br />
China Internet Network Information Center
WHY IT MATTERS<br />
Marketers and technologists are<br />
scrambling to figure out Chinese<br />
social media and internet usage as<br />
it’s grown rapidly and now<br />
represents the largest smartphone<br />
user base for any individual nation.
From Jan-13 to<br />
Mar-14, US ownership<br />
of the 10 globally most<br />
trafficked Internet<br />
properties fell 33%<br />
3<br />
comScore: 1/13 and 3/14
WHY IT MATTERS<br />
While the US still controls #1-4<br />
Google, Microsoft, Facebook, Yahoo,<br />
and Wikipedia, China now owns<br />
#6-9: Alibaba, Baidu, Tencent,<br />
Sohu, up from just one site in 2013<br />
(Tencent ). The growth of China<br />
continues.
Storage costs fell 99.8%<br />
and bandwidth costs<br />
dropped 98.4% from<br />
1999-2014<br />
4<br />
John Hagel, Deloitte,
WHY IT MATTERS<br />
The infrastructure of the internet is<br />
in computing costs, bandwidth and<br />
storage. It’s difficult to appreciate<br />
how much cheaper it is to send and<br />
store data. What changes when<br />
bandwidth and storage are<br />
effectively zero?
Venture financing in<br />
both number and<br />
dollar amount is over<br />
50% below the 2000<br />
peak.<br />
5<br />
Thomson ONE. Funding per Financing ($MM) calculated as total venture financing per year divided by number of deals.
WHY IT MATTERS<br />
With high profile IPO’s and<br />
enormous valuations, it’s<br />
reasonable to wonder if we’re<br />
actually in another bubble. The<br />
aggregate funding for startups in<br />
2000 was $101B vs $24B in 2013,<br />
which shows we’re actually far from<br />
the first dot-com boom.
Mobile
70% of mobile phone<br />
users do NOT have a<br />
smartphone.<br />
6<br />
Mary Meeker & KPCB Internet Trends 2014
WHY IT MATTERS<br />
While a staggering 1.1B<br />
smartphones were shipped in 2013,<br />
many were replacements. Only 1.6B<br />
of the 5.2B mobile phone users have<br />
smartphones.
Tablets are shipping<br />
twice as many units as<br />
Desktop PC’s globally.<br />
7<br />
Morgan Stanley Research
WHY IT MATTERS<br />
Tablets are a young technology but<br />
gaining adoption at a fast clip, with<br />
80M units shipped in Q4 of 2013<br />
alone.
Tablet users represent<br />
28% of smartphone<br />
users and only 8% of<br />
TV users globally.<br />
8<br />
KPCB estimates based on Morgan Stanley Research and ITU data
WHY IT MATTERS<br />
The accelerated adoption of tablets<br />
still has plenty of room to grow: lots<br />
of people still haven’t acquired even<br />
their first tablet yet.
In Asia and Africa,<br />
mobile usage is already<br />
37% of total web usage.<br />
9<br />
StatCounter, 5/14
WHY IT MATTERS<br />
Compared to North American and<br />
Europe (19% and 16% respectively)<br />
Asia and Africa are truly mobilefirst<br />
continents, where a significant<br />
portion of Internet traffic going<br />
through smartphones.
Mobile is the most consumed<br />
medium (over TV) in Italy,<br />
Japan, Canada, India,<br />
Germany, UK, China, USA,<br />
Nigeria, Indonesia, Brazil,<br />
and Saudi Arabia.<br />
10<br />
Milward Brown AdReaction, 2014
WHY IT MATTERS<br />
TV is not going away, but the game<br />
has changed and marketers still<br />
don’t spend as much time on mobile<br />
as is warranted by the time<br />
consumers spend on it.
97% of global smartphone<br />
operating systems<br />
(Android, iOS, Windows)<br />
are built by companies<br />
with US headquarters.<br />
11<br />
IDC, 2013
WHY IT MATTERS<br />
While there has been significant<br />
growth across the globe in internet<br />
users and internet companies, the<br />
core technology powering one of the<br />
most important internet devices<br />
(smartphones and tablets) are still<br />
owned by the US.
Google’s Average<br />
Revenue Per User<br />
($45/yr) is 6x<br />
Facebook and 12x<br />
Twitter.<br />
12<br />
SEC Filings & Comscore. ARPU = Average Revenue per User, defined as annualized revenue per Monthly Active User<br />
(MAU). Google ARPU is calculated using Google’s gross revenue & Comscore unique visitors.
WHY IT MATTERS<br />
While platforms are not all created<br />
equal, the fact that Google makes so<br />
much per user bodes well for still<br />
maturing Internet Giants like<br />
Facebook and Twitter.
Americans spend 4x more<br />
time on mobile devices<br />
(20% of total media<br />
consumption) compared to<br />
newspapers and<br />
magazines.<br />
13<br />
Advertising spend based on IAB data for full year 2013.
WHY IT MATTERS<br />
Despite the incredible time spent on<br />
mobile devices, print pulls 19% of<br />
total ad revenue, vs 4% for mobile.<br />
That’s a $30B gap that Mary Meeker<br />
of KPCB believes will eventually get<br />
closed.
Mobile apps generated<br />
$26B in 2013, more<br />
than 2x the revenue of<br />
mobile ads.<br />
14<br />
Global Mobile App revenue per Strategy Analytics; Global Mobile Advertising revenue per PWC
WHY IT MATTERS<br />
Given the fact that mobile<br />
continues to struggle to convert<br />
time spent into ad dollars, it’s<br />
possible that revenue from<br />
subscriptions, virtual goods, and<br />
downloads is where the most<br />
opportunity is for mobile.
Social
There are 1.8B images<br />
shared every single day on<br />
just 5 platforms (FB,<br />
Instagram, Snapchat,<br />
WhatsApp, Flickr).<br />
15<br />
KPCB estimates based on publicly disclosed company data, 2014 YTD data per latest as of 5/14
WHY IT MATTERS<br />
Visual content are coming to<br />
dominate our digital experiences,<br />
which means that high quality<br />
image are going to key part of every<br />
marketer’s arsenal.
The social referral<br />
half-life of a tweet is 6.5<br />
hours, a Facebook post:<br />
9 hours.<br />
16<br />
Shareaholic, 3/14. SimpleReach, 5/14.
WHY IT MATTERS<br />
There is always more content in the<br />
stream. Your content has to stand<br />
out and it probably needs to be reshared<br />
multiple times to get its full<br />
reach.
Top Twitter news<br />
publishers are BBC and<br />
NYTimes while top<br />
Facebook news<br />
publishers are BuzzFeed<br />
and Huffington Post.<br />
17<br />
NewsWhip - Spike, 4/14
WHY IT MATTERS<br />
Nothing shows the differences<br />
between platforms than what kinds<br />
of content is popular there. The<br />
audience on Facebook prefers more<br />
consumer/lifestyle content while<br />
Twitter users prefer more<br />
professional / “important” news.
6 global mobile messaging<br />
services (WhatsApp, Line,<br />
WeChat, KakaoTalk,<br />
Snapchat and Viber) now<br />
total over 1B users in less<br />
than 5 years<br />
18<br />
Publicly disclosed company data for 2013. Note: Snapchat messages / day = # of snaps sent and #
WHY IT MATTERS<br />
Compared to North American and<br />
Europe (19% and 16% respectively)<br />
Asia and Africa are truly mobilefirst<br />
continents, where a significant<br />
portion of Internet traffic going<br />
through smartphones.
Software Eating the World
Only 1.3B music tracks<br />
were sold in 2013,<br />
versus 118B tracks<br />
streamed.<br />
19<br />
Nielsen & Billboard 2013 US Music Report, 1/14
WHY IT MATTERS<br />
This the first year on record where<br />
digital music track sales have fallen.<br />
Spotify, Pandora, and other music<br />
streaming services have completely<br />
taken over digital music.
Bitcoin wallets grew by<br />
800% in 2013 to reach<br />
5M globally by March<br />
2014.<br />
20<br />
CoinDesk
WHY IT MATTERS<br />
Cryptocurrency is a real thing and<br />
only getting bigger. Those wallets<br />
are split across five major<br />
companies.
70% of 4-year college<br />
grads had to borrow<br />
money, with the<br />
average debt around<br />
$30k/<br />
21<br />
The Institute for 25 College Access & Success, 2014. Consumer Financial Protection Bureau. ‘Voice of the<br />
Graduate,’ McKinsey / Chegg.
WHY IT MATTERS<br />
Post-secondary education is<br />
expensive and underperforming.<br />
33% of grads don’t feel their their<br />
education prepared them well for<br />
employment. Can you imagine a<br />
product that put you into 5 figure<br />
debt with such a low rating?
Education technology<br />
companies Coursera,<br />
Khan Academy, and<br />
Duolingo boast userbases<br />
of 7M, 10M, and 25M<br />
respectively.<br />
22<br />
Duolingo, Coursera, Kahn Academy Company Data
WHY IT MATTERS<br />
Major educational platforms are<br />
emerging as the poor ROI on college<br />
pushes students to seek new<br />
opportunities to learn and prepare<br />
for the job market.
Eventbrite sold over<br />
58M tickets to 1M<br />
events (60% growth) in<br />
2013.<br />
23<br />
Eventbrite Company Data
WHY IT MATTERS<br />
Traditional ticketing companies<br />
like Live Nation have stalled out,<br />
selling just under 150M tickets each<br />
year for the past 3 years. Technology<br />
driven companies like Eventbrite<br />
are hot on their tails.
Grubhub had 39M<br />
meal orders to just 29k<br />
restaurants in 2013.<br />
24<br />
Grubhub Company Data
WHY IT MATTERS<br />
Not only is online food ordering a<br />
totally commonplace thing, but the<br />
amount of leverage marketplace<br />
companies hold over their suppliers<br />
can be immense (1345 : 1 ratio of<br />
meals to restaurants)
The iPhone 5s (2013)<br />
contains five sensors.<br />
The Galaxy 5s (2014)<br />
contains ten.<br />
25<br />
Publicly available data from Apple & Samsung, and third party reviews
WHY IT MATTERS<br />
While wearables get a lot of the<br />
attention when it comes to realtime,<br />
personal analytics, we can’t<br />
forget that smartphones are<br />
actually the most prevalent and<br />
powerful sensors today.
AppDynamics, an app<br />
performance<br />
monitoring company,<br />
has tracked 500B web/<br />
mobile transactions<br />
26<br />
AppDynamics Company Data
WHY IT MATTERS<br />
We’ve been generating tons of data,<br />
but most of it hasn’t been analyzed.<br />
Data mining and organization tools<br />
are growing quickly to help<br />
businesses and consumers make<br />
sense of their data.
Nest has helped<br />
consumers save 2B<br />
Kilowatt hours via<br />
smart thermostat<br />
controls since 2011.<br />
27<br />
Based on Nest comparison of actual schedules and set points to a hypothetical (holding constant temperature)
WHY IT MATTERS<br />
The data analytics can be tied<br />
directly into responsiveness –<br />
resulting in seriously powerful<br />
outcomes.
TV & Video
YouTube’s top six stars<br />
have between 6M and<br />
26M subscribers and all<br />
have seen 50%+ Y/Y<br />
growth.<br />
28<br />
YouTube, 5/14
WHY IT MATTERS<br />
New mediums produce new stars<br />
despite the unfair advantage<br />
existing players have because the<br />
context, style, and audience is<br />
different.
Spectator Gaming is a new<br />
genre of video, with the<br />
leader, Twitch, reporting<br />
12B minutes of video game<br />
footage watched by 45M<br />
users in April 2014.<br />
29<br />
Twitch Company Data. Qwilt, 4/14
WHY IT MATTERS<br />
Video games are not a massive<br />
medium in of itself, but as with<br />
most popular things, watching<br />
people perform signals the cultural<br />
significance (and marketing<br />
opportunity) in video games<br />
spectators.
TV viewers who<br />
simultaneously use<br />
Twitter have up to 100%<br />
higher rates of ad recall,<br />
brand favorability, and<br />
purchase intent.<br />
30<br />
Twitter x TV Study, Millward Brown Digital, 12/13
WHY IT MATTERS<br />
It doesn’t have to be either or.<br />
Television is still an important<br />
medium that can be enhanced via<br />
integrated social campaigns on<br />
mobile platforms.
Millennials spend 3x as<br />
much time watching<br />
Online TV compared to<br />
non Millenials.<br />
31<br />
Verizon Digital Media Study, 3/14
WHY IT MATTERS<br />
TV producers and networks have to<br />
adapt to the fact that Millenials<br />
want far more control over the<br />
content they consume and the way<br />
they consume it.
Percolate is the world’s leading content marketing platform<br />
with a mission to help brands create content at scale.<br />
Want to learn more? <br />
Contact learn@percolate.com for more information <br />
or request a demo today at percolate.com/request-demo
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