Meeker Report Spotlights Mobile Growth

Mary Meeker has weighed in with her annual state-of-the Internet slide show extravaganza, highlighting key industry trends in a multitude of charts. The prominent Internet analyst and Kleiner Perkins Caufield & Byers partner issued the 164-page report at the Re/code conference on Wednesday.

The presentation again this year notes that the share of media time spent with mobile (smartphones and tablets) far outstrips the proportion of ad dollars it gets. It estimates that mobile accounts for 20% of time spent, but garners only 4% of all ad spending.

Conversely, print now accounts for only 6% of time spent, but still claims 23% of ad budgets. That imbalance, she suggests, implies a roughly $30 billion gap in mobile ad spending relative to time spent, based on last year’s U.S. total of $7.1 billion in mobile ad sales.

Not everyone agrees that mobile time spent and ad spending will necessarily align.

“It is possible that time and money might balance across media one day (the radio industry would be particularly thrilled if this happened), but it’s more likely that time and money will stay mismatched for most media,” wrote Brian Wieser, a senior analyst at Pivotal Research Group, in a research note last week.

The study points to continued mobile growth overall. While the number of Internet users will increase by less than 10% this year, smartphone subscribers will grow more than 20%, although slowing from the previous year. Mobile data traffic is expected to surge 81% this year thanks to video, where mobile now makes up 22% of consumption.

Furthermore, only 30% of the world’s 5.2 billion mobile users have smartphones -- leaving room for growth, especially in emerging markets like China. Similar upside is seen for tablets, which so far have only reached 6% penetration globally. However, Wall Street and tech analysts in the near-term project slowing tablet sales this year, due to slowing demand and the rise of “phablets.”

The report downplays recent talk of another tech bubble. Meeker acknowledges that there may be some excess in tech company valuations, but argues that things aren’t nearly as frothy as during the dot-com era, when she became known for bullish calls on Internet stocks. She noted, for example, there were only 41 IPOs last year, compared to 310 in 1999 and 221 in 2000. Dollar volume was also much higher.

Among other key findings from the slides:

*Mobile ad and app spending totaled $38 billion in 2013, up from $24 billion in 2012.

*Mobile devices accounted for 25% of total Web usage last year, compared to 14% in 2012.

*66% of U.S. tablet owners surf the Web while watching TV, and 44% are shopping.

*52% of ESPN digital users access the site only on smartphones and tablets, equating to 48% of time spent.

*Google’s average revenue per user (ARPU) is six times that of Facebook, and Facebook’s is twice that of Twitter.

*China’s mobile uses now make up about 80% of its Internet population. The country is leading the mobile commerce revolution.

*95% of networks are compromised in some way, and as mobile platforms grow, directed attacks will rise.

 

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