BUS206: Management Information Systems

In the beginning there was the internet – and growth in overall users is slowing down says Meeker. Even global smartphone growth is slowing quite dramatically as this chart, looking at overall smartphone shipments by operating system, shows.

I wonder if the slowdown suggests that people aren't upgrading their phones as frequently as they used to. As smartphones become ever more advanced and feature-packed, and continue to be relatively pricey items to acquire, perhaps there's not so much user demand for the latest models (with affordability factors in developing markets in particular).

I can testify to that from my experience with my Galaxy S6 (an Android phone) that I bought less than a year ago where I have resisted the temptation to upgrade it to the latest Galaxy S7.

Maybe there isn't yet a tipping point, a game-changer device or feature, that would present consumers with a truly compelling proposition that would drive them in droves to the latest devices.

Demographic trends show slowing global population growth, declining birth rates and longer life expectancies Meeker says – just one macro-metric set to place alongside others in her report that address global debt, interest rate trends, and more, all of which show changes that suggest, says Meeker, that the years of easy growth since the mid 1990s are now behind us.

While Meeker's metrics for internet advertising growth relate to the USA, I think there are clear indicators of what's happened and will likely happen in other developed markets especially in Europe as desktop advertising continues to slow and mobile advertising growth begins to really accelerate.

Google and Facebook enjoy the lion's share of internet advertising growth – 76% year-on-year between them. While Google leads by a large margin in revenues, Facebook's 59% growth from 2014-2015 easily outpaced Google's at just 18%.

I can't talk about online advertising without mentioning ad blocking, a topic I've written about here quite a bit in recent months.

Meeker's report addresses the topic, noting that ad blocking increased by 16% year-on-year on the desktop, but by a whopping 94% on mobile.

It seems clear that mobile will be the next battleground for advertisers aiming to catch the attention of consumers and not get blocked. Hard to see worthwhile outcomes for advertisers unless they create better ads as Meeker's slide notes.

Not only is ad blocking software readily available to consumers, but also mobile operators like Three UK are starting to experiment with ad blocking at the network level. Where will this go, I wonder. The stakes for advertisers are high especially as the use of video advertising on mobiles starts to take off with Meeker citing use cases with Snapchat that garnered impressive viewing figures.