Report: Google, Facebook Control 85% of Online Ad Growth

Kleiner Perkins Caufield & Byers venture partner Mary Meeker released her annual Internet Trends Report this week, identifying a number of important points for the tech industry.

Meeker revealed her 2017 Internet Trends report at the Recode Code Conference this week, outlining the general state of the tech industry. Meeker’s report compiles information on what areas of tech are being funded, how internet growth is spreading, what areas of tech are resonating with people, and where the future of the industry may lie. Here are some of the biggest takeaways from the 2017 report.

1: Smartphone Sales Are Slowing

According to Meeker’s report, while Internet user growth has been pretty steady at a 10% growth per year, smartphone sales have slowed. Global smartphone shipments only increased by 3% this year in comparison to 10% in previous years, and the smartphone install base also slowed, growing by 12% in 2017 in comparison to 25% in previous years. Internet engagement in the US has stayed the same with a solid 4% increase per year.

2: Google and Facebook Control 85% of Online Ad Growth

According to Meeker’s report, Facebook and Google now control as much as 85% of online ad growth. Google’s ad growth has increased by 20% year on year, increasing ad revenue from $30 billion to $35 billion between 2015 and 2016, while Facebook has increased its ad revenue by 62% from 2015 to 2016.

3: Internet Ad Spending Will Surpass TV Within 6 Months

Meeker believes that the amount of money spent on internet ads will soon surpass the amount spent on television ads within the next 6 months. This projection is based on the previous internet ad expenditure versus previous tv expenditure. Below is the chart used by Meeker to describe this.

4: eSports Is a Huge Industry That Will Continue to Grow

Meeker states that the eSports industry is exploding with viewing time up 40% year over year. Combined with a number of millennials strongly preferring eSports over traditional sports, the industry seems set to take off.

5: Streaming Music Has Surpassed Physical Sales

For the first time in 16 years, the music industry has seen revenue growth thanks to streaming music which has finally surpassed physical music sales. Streaming music giant Spotify now makes up 20% of the entire global music industry’s revenue.

Read the full report from Meeker here.