6 Financial Marketing Takeaways from the 2019 Internet Trends Report

Mary Meeker's annual Internet Trends Report is a massive 333-page analysis of digital technologies and the impact on consumers, companies and commerce. Here's what bank and credit union marketers need to know as they prepare their organizations for the digital future.

Every year since 1995, analysts, investors and media look forward to Mary Meeker’s report on the state of the internet. The 333-page “Internet Trends 2019” report is filled with vast amounts of insight into what is going on in digital channel use, technology, consumer behavior, eCommerce, social media, data growth, payments, privacy, the future of work and, of course, China’s increasingly dominant position in each of these categories. Meeker, Partner at Kleiner Perkins Caufield & Byers, the venture capital and private equity firm, even touches on the impact of visual communication, interactive gaming, and voice as digital engagement tools.

The key takeaways from this year’s report include:

  • The channel of choice for consumers is increasingly mobile.
  • Internet ad spending is increasing, with Google and Facebook getting the most spend.
  • The cost of customer acquisition continues to increase.
  • Visual communication is on the rise.
  • The availability and use of data for personalization is exploding.
  • Security and privacy concerns remain an important differentiator.

While intentionally broad in scope, the report provides “food for thought” as financial institutions – and financial marketers especially – try to develop strategic planning options for the future. Meeker provides insights into the impact of e-commerce platforms and the increasing use of visuals to tells stories digitally. She also discusses the increasing cost of new customer acquisition and how that is impacting the allocation of marketing dollars.

Finally, Meeker highlights the availability and use of data to improve personalization and how the same trend impacts regulations around security and privacy. “If it feels like we’re all drinking from a data fire hose, it’s because we are,” Meeker stated as her report was presented to analysts.

Read More:

1. Shift to Mobile

In 2018, 51% of the world’s population was connected to the internet (3.8 billion people). This is the first time that more than half of the world’s population is online, according to Meeker, and represents a 6% year-over-year growth. The growth may not be sustainable, however, since global smartphone shipments saw -4% year-over-year growth.

Meeker said that in the U.S., the average person is spending 6.3 hours a day on the internet. Increasingly, that time is being spent on mobile devices as time on the computer is declining. It is also the first time that Americans spent more time on their mobile devices than they did watching TV. According to Meeker, adults spent an average of 226 minutes on their phones compared with 216 minutes on TV. Ten years ago, mobile usage was at 20 minutes and TV viewing totaled 266 minutes daily.

Why this trend matters: For financial marketers, this means there must be a significant shift in the channels used to reach prospects and customers. In addition, marketing campaigns, new products, ongoing communication, and all design development must recognize that mobile has become the primary way content will be consumed.

2. Internet Ad Players Expanding

Internet ad spending continues to increase, with Google and Facebook being the primary partners of choice. Google saw +1.4x increase in ad revenue since 2017 with Facebook achieving +1.9x increase in their ad revenue. Overall growth in ad spend in 2018 was 22%, which exceeded the 21% growth in 2017.

That said, competitors such as Amazon, Instagram and other services are starting to erode the share of the big two tech firms. In fact, the combination of ad revenues from Amazon, Twitter, Snap and Pinterest saw an increase of +2.6x over the last two years. Meeker said these platforms and others are increasing revenues with better targeting, enhanced creative, increased relevancy through the use of AI, and stronger offers.

Much of the focus is also on mobile advertising. Meeker mentioned that the impact of digital video rose to 28% in 2018, compared with 25% in 2017, with short-form videos on Facebook doubling in the past year to 1.5 billion. The potential downside in the space is the scrutiny of the Google and Facebook ad models by regulators, who are concerned about concentration of market share and the use of consumer data.

Why this trend matters: Financial services continues to lag other industries in the use of internet marketing. Traditional media continues to become less and less effective. To capture the attention of customers through improved targeting, social channels will need to increase as a percentage of advertising budget.

3. Cost of Customer Acquisition May Exceed Value of Customer

Capturing the attention of the digital consumer is getting increasingly difficult. The report states that customer acquisition costs (CACs) in many instances might be “rising to unsustainable levels,” because the cost may surpass the long-term revenue value of the new customer. Meeker highlighted examples where the costs of getting a new customer may be too high, such as with mobile banking apps.

To combat the high cost of acquisition through traditional means, Meeker suggests that marketers should test offering free trials or unpaid versions of services to attract potential customers and to keep them engaged. This allows potential customers to test products and services, possibly with a more limited feature set or embedded ads. The report provided examples, such as online game Fortnite, enterprise software Slack and Dropbox and consumer platforms like Spotify and Amazon Prime.

Why this trend matters: In banking, new ways to acquire customers are being experimented with and could provide opportunities for marketing innovation. Not only could new testing models be part of the marketing mix, but the ability to market within new platforms (such as online games) could provide unique potential.

Read More:

Webinar
REGISTER FOR THIS FREE WEBINAR
Gen Z is Here: 6 Tips to Drive Engagement with the Next Generation
Join EVERFI for a webinar exploring Gen Z financial attitudes and behaviors, as well as the six key tips for brands to engage with this growing consumer base.
TUESDAY, October 15tH at 2pm (ET)

4. Importance of Pictures

The continued high use of Facebook and the strong growth of YouTube and Instagram highlight the increasing importance of images and storytelling on digital media platforms. All social media platforms have increased their emphasis on visual content, image creation and the sharing of visual stories. Meeker’s report estimated that more than 50% of Twitter impressions come from tweets that include images, video or other visual media.

The evolution on Instagram alone has been quick and dramatic. From the sharing of individual pictures in 2011, to image search capabilities in 2015, to the explosion of image and video storytelling in 2016 to the use of Instagram as a viable eCommerce platform more recently, it is clear that consumers are embracing visual content primarily on mobile devices.

Why this trend matters: While banks and credit unions primarily focus on the distribution of non-tangible goods, organizations will need to start using stories to engage consumers around themes on saving, investing, improving financial management and ways to achieve dreams. The importance of content development and deployment also cannot be over-emphasized.

5. Leveraging the Data Explosion

Businesses are collecting more data than ever. And the trend is accelerating as digital tools like machine learning and data analytics are increasingly within the financial reach of even the smallest organizations.

As quoted by Frank Bien, CEO and President of Looker, “Data is the new application.” Meeker reinforced the importance of data on the entire digital landscape by stating businesses, consumers, and even regulators are all “drinking from the data fire hose” as more data is collected, stored in the cloud, processed, analyzed by AI, and deployed. The results is the ability to streamline processes, target offers, and enhance customer experiences.

In a survey of retail customers, 91% said they prefer brands that provide personalized offers and recommendations; 83% said they are willing to passively share data for personalized experiences; and 74% said they are willing to actively share data for personalized experiences.

Why this trend matters: The improved use of data and advanced analytics was the number one trend is the 2019 Retail Banking Trends and Predictions report published by the Digital Banking Report. This was the first year that “Improve the customer experience” was not the top trend. This does not illustrate a decrease in focus on customer satisfaction, but the realization that data and analytics are the foundation for growth in the future.

6. Security and Privacy

Security and privacy continue to be an important issue for consumers as well as a strong point of differentiation for businesses. The Internet Trends Report found that over 50% of people are concerned about privacy (actually down from 64% in 2014). It is becoming clearer that consumers are still willing to share their data, but will only do so in exchange for “personalized services”.

Meeker expects more options to make digital communications safer going forward. In 2018, 87% of global web traffic was encrypted, up from 53% three years ago. These trends point to the potential for security and privacy to be a major selling feature for consumers, especially in light of the continued discussion around how Facebook and other social media platforms handle data.

Why this trend matters: Financial institutions have always been focused on data security and privacy and this trend will obviously continue. But, as we have seen with the increased use of embedded biometrics for access to mobile banking apps, consumers want security options that will protect them seamlessly, without slowing down the accessibility of apps.

Key Takeaways from 2019 Internet Trends Report

The annual Internet Trends Report from Mary Meeker does not focus much on the financial services industry. That said, it does not mean that the findings are irrelevant. For instance, it is clear that financial services organizations can no longer ignore the importance of increasing the use of internet ads as part of the marketing mix. Social media use by consumers makes it evident that banks and credit unions need to connect with consumers on the primary and secondary channels using strong content, visuals and video.

It is also clear that mobile use continues to grow and that financial institutions with limited marketing budgets will need to double down on mobile marketing and mobile app development as opposed to mass media and online tools.

This article was originally published on . All content © 2019 by The Financial Brand and may not be reproduced by any means without permission.