When Mary Meeker releases her annual Internet Trends report, digital advertisers listen. What key insights did she reveal this year, and what are the implications for healthcare communicators?
Mary Meeker is an analyst whose eponymous Internet Report is eagerly awaited every year since she co-authored the first back in 1995 while at Morgan Stanley. Loaded with intriguing data from multiple sources, her presentations identify influential trends and have made several spot-on predictions, including identifying opportunities in emerging countries, and the exponential rise of social media and mobile technology.
A partner at Kleiner Perkins Caufield & Byers since 2010, her reports continue to resonate, this year’s a real doozy in terms of revealing an especially disruptive landscape: Global economic deceleration has for the first time slowed Internet and device growth, while mobile and social platforms continue to push the transformative power of “conversational commerce,” heralding increasingly personalized services, bots, and artificial intelligence.
Watch her presentation from the Core Conference and download her data-rich deck. As our own Brad Einarsen shared in this week’s Klick Wire update, Android OS, mobile, video, messaging, and privacy concerns dominate the current landscape, and trend into 2017 and beyond. Here we’ll summarize several of these and other top-line trends, tying a few fascinating insights together to determine implications for pharma marketers, digital health aficionados, and ultimately all healthcare system stakeholders:
Quench Your Thirst on the Next Bubble Burst
Taking a quick peek at stock and commodity market performance over the past two decades shows the roller coaster ride, punctuated by the dotcom and real estate bubble bursts of 2000 and 2008, respectively. As if eight years is the magic number, sure enough 2016 reveals another global economic binge and purge, attributable this time to multiple factors, including European debt, Chinese hyper-growth, plummeting oil prices, and others:
As Meeker describes, the current downward trending can be seen through the lens of five key growth drivers, all losing steam in 2016:
- Connectivity: Internet users have risen from 35M in 1995 to more than 3B today, but for the first time the year-t0-year growth has flattened at 9%
- Emerging Countries: China, Asia, and the Middle East have had astonishing economic growth over the past six years, all likely peaking
- Global Government Debt: Ratio of debt-to-GDP is at record highs, slowing economic growth for most major markets across the planet
- Interest Rates: Continue to fall to record lows reflecting the economic struggle, for example US Treasuries at 1.9% (compared to 6.6% in 1995), with no rise in sight
- Population Growth and Aging: Fewer babies are now being born for future workforces, who’ll have to support increasingly older populations
Such a global market of slowing growth, increasing debt, and aging populations puts intense pressure on businesses to innovate, become more efficient, create jobs, and lower prices—all opportunities digital tech and the Internet are optimally suited for. Amid this backdrop, pharma marketers are under similar pressures and have equally compelling opportunities to shift budgets and evolve their expertise in digital health. Let’s see what lessons we can learn:
Go Mobile or Go Home
The global economic slowdown has not only led to Internet growth going flat (9%), but a deceleration in the number of smartphone users (31% to 21%) and device shipments (28% to 10%). While the growth in new mobile users is slowing, however, user engagement and ad dollars are explosively shifting to mobile from desktop: Of the $60B spent on Internet ads, mobile ad spending grew by more than 66%, compared to just 5% for desktop.
But as Meeker reveals, advertisers over-index on traditional media (especially print and TV), and allocate only 12% of their budgets on mobile despite consumers spending 25% of their time there. That exposes a $22B gap between measured engagement and actual spend—a beckoning opportunity for Madison Avenue yet a frustrating one for pharma marketers; as we’ve seen, overall digital spend for our industry is projected to remain flat until 2020.
If the dwindling desktop market is any indication, the term “mobile” will likely cease to have any meaning within a few years, further reinforcing the eventual ubiquity of smaller and smaller touchscreens, wearable tech, and built-in sensors. Given the trend, pharma has no choice but to immediately embrace the inevitable despite the challenge of ensuring fair balance across all browser types and sizes, and the special demands and strategies of mobile ads.
Remember how not too long ago the industry freaked out over “mobile-optimization,” separate websites created for mobile and desktop? And the rugged road to embrace responsive design and browser-neutrality, now considered mandatory and standard? Unfortunately, pharma mobile spending remains disproportionately small—yet if Meeker’s report is any sign, our efforts need to eventually shift from “mobile first” to essentially “mobile only.”
Stay Relevant or Get Blocked
Being present on mobile for pharma marketers is already a challenge, exacerbated by the recent “Ad Blocker Shocker,” namely the astronomical rise in mobile ad-blocking usage:
As Meeker points out the problem goes beyond display ads, with over 80% of users muting video ads, and more than half hating forced pre-roll viewing. The solution? Better content that’s authentic, entertaining, emotional, personal, and useful—and better features that are unobtrusive and give viewers control. She cites several examples of ads that work, using quality content and innovative functionality to transform an exhausting nuisance into a meaningful experience.
Go “Beyond the Ad”
We frequently discuss the importance of the pharmaceutical industry going “beyond the pill,” a shift from making molecules to providing broader healthcare benefits through expanded services and big data. In her report, Meeker shares fascinating observations about Millennial digital users and the intertwining of technology, media, and distribution to transform and essentially redefine commerce.
What’s cool and compellingly relevant for us in pharma is the lesson of how numerous startups using geo-located always-on connectivity, hyper-targeted fully personalized engagement, social sharing, and interactive multimedia exploded from zero to $100M in revenue in less than five years. Innovators such as Stitch Fix seamlessly blend data, curation, feedback, and social to blur the lines between product, brand, retailer, and distributor.
Back to the pharma mobile ad dilemma, which is actually identical to the global ad dilemma: What might these startups teach us about serving relevant, compelling, and actionable ads that shape behaviors? The answer: Reimagine technology and communications through social platforms that integrate multimedia and messaging. The strategy: Go beyond trying to design and distribute an unblocked ad, to participating in “conversational commerce” that creates genuine value.
Join the Healthbot Revolution
OK, so our digital audiences are increasingly mobile, and demand products that are personalized and sharable, essentially indistinguishable from the services and channels that provide them. Meanwhile, back in Pharmaland we struggle to even get basic branded messaging through MRL review—so just imagine approving dynamic, real time, geo-located, user-generated content, let alone offering customized, sharable treatments… #fail
Meeker to the rescue: As she points out, messaging apps have taken over the world, with most of the major players including WeChat and Facebook Messenger offering businesses official accounts, advertising, partnerships, and payment systems. Millennials actually prefer to communicate with businesses through social networks and chat via their mobile phones, a complete 180 from their parents/grandparents, who used their phones the old fashioned way:
Combine these rapidly evolving user behaviors, technologies, and features, and you have a perfect storm ushering in a chatbot revolution: User input is analyzed with artificial intelligence software, which responds with the right information, products, or services. Meeker provides data from multiple sources to illustrate the context for such interactive chat-based functionality, and how these apps have already become the “second screen” for many:
Last month we discussed the new Facebook chatbots, and the mobile user experience transformation from rows and rows of Yahoo portal-style apps to chatbots poised to answer questions, provide personalized experiences, and learn more about you and your preferences. We also showcased how Healthtap is one of the first “healthbots,” designed to connect patients with healthcare information, and even their physicians.
What’s fascinating is how Meeker describes the rise of the chatbot/healthbot through the lens of Internet trends, a data-driven convergence of messaging apps, chat functionality, personalized e-commerce, and voice-activated interfaces such as Amazon’s Alexa that bypass a keyboard altogether. One amazing step further, a flurry of recent articles showcase chatbot/healthbot functionality powered by IBM Watson, and integrated within display ads!
From Tap to Voice Back to Klick
Bots built into banner ads bring us back full circle. Although these trends and their potential applications might seem light years away for pharma marketers, Klick Health is not only on the pulse of all the data, but already innovating off the insights and creating applications on the go. For example, we’re prototyping healthbots, and discovering ways to engender a personalized experience for patients and professionals while remaining fully compliant. We’re mobile-first, and understand the patient experience.
As Meeker concludes, the top Internet companies of 2016 illustrate the kind of business philosophy, organizational structure, and operating principles driving the future, today:
As she insists, the present value of future cash flows is the best way to determine who wins and who fails. The companies now flush with cash are a quantum leap ahead of the Coca-Cola and Ford Motors of a prior generation: Apple, Google, Amazon, and Facebook each redefined user experience, technology, media, and distribution, their product a service, their service pentabytes of data that connect and engage billions of people throughout the planet.
Is your agency poised for the future, or struggling with the past? As the world gets ready for self-driving cars and data platforms driving the Internet of Everything, partner with a healthcare communications innovator with whom you can expect the unexpected, an industry leader that not only understands the trends, but helps define them. Call Klick.