What trends in mobile advertising, driverless cars mean for media companies

By Kevin Curnock

Brunswick News

St. John, New Brunswick, Canada


Every year, the Silicon Valley-based venture capital firm Kleiner, Perkins, Caufield, and Byers (KPCB) publishes the Internet Trends Report. It is an excellent read. The 2016 version of this report was released earlier this month.

For traditional news media companies, there is a lot to digest.

This year's Internet Trends Report shows that people around the world are living a lot longer, which means printed newspapers are still relevant.
This year's Internet Trends Report shows that people around the world are living a lot longer, which means printed newspapers are still relevant.

Here are some of the trends that have an impact on audiences, and what that means for news media companies.

Smartphone shipments: massive but growth slowing

Smartphone unit shipments are growing at a decreasing rate. Year-over-year growth was around 10% in 2015, the lowest growth since 2010. Even so, there were well over one-billion smartphone shipments in the year.

If you are publishing content, you absolutely need to make it work on a smartphone. The Android operating system dominates the market, with more than 80% of the market share.

Demographics: living longer

The good news for news media publishers is that people are living longer. Worldwide, the average life expectancy is more than 70 years old. In the United States, it is nearly 80.

The people who subscribe to and read printed newspapers will be around for a while yet.

Internet advertising: ridiculously large

In the U.S., Internet advertising was US$60 billion in 2015. The rate of annual growth has consistently been between 15% and 20% since 2010.

Mobile advertising made up about one-third of total Internet advertising.

If you are in the news media business and you are selling ads, you better be optimised for mobile.

Google and Facebook

These two companies accounted for more than three-quarters of Internet advertising growth in 2015 in the U.S. The amount of advertising they sell is staggering: Google alone had nearly US$30 billion in ad revenue.

And even with these massive numbers, there is more room for growth — particularly in mobile.

The mobile market accounts for 25% of consumer time spent and only 12% of total advertising spend. If this ad spend were to move up to 25%, a lot more money would flow into mobile. KPCB estimates this represents a US$22 billion opportunity.

Video ads: short, sweet, and popular

Snapchat is revolutionising the mobile video experience. Effective video ads are vertical, full-screen, and brief — as short as 10 seconds.

News media companies have two opportunities: provide news video content in the same manner and sell ads that match.

Pretty pictures drive online shopping

Internet-enabled retail sales are growing. The main reasons, as the KPCB report explains, are “always-on connectivity, hyper-targeted marketing, images, and personalisation.”

Consumers are using image-based platforms to find the products they want to buy. Pinterest is proving to be the ideal platform to support this behaviour: 55% of Pinterest users are shopping for products, versus only 12% of Facebook users, and 12% of Instagram users.

As Business Insider puts it, Pinterest is “blowing away” the competition.

Driverless cars

Car manufacturers (e.g. Tesla) and tech companies (e.g. Google) are on the path to manufacture and sell self-driving vehicles. This could free up as much as 19 hours per month that drivers currently spend commuting. Your daily commute will no longer be a slog.

What does this mean for media companies? People will have more time to engage with media. Commuters will have more free time to catch up on local and world events.

Companies peddling content will want to pay close attention.

Final words

There is a lot more to digest in this 213-slide report: the rise of China, the growth of messaging services, and big bets on tech companies.

It is worth your time to read.

About Kevin Curnock

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