Post on 06-Jan-2017
In the last two decades, three trends in technology have transformed the way people communicate: search, social, and mobile.
As entrepreneurs like Mark Zuckerberg or Steve Jobs created new tools for digital communication, brands, startup founders, and venture capitalists rushed in to take advantage of this ever expanding universe.
This is a story about the digital marketing revolution that sparked thousands of companies and billions of dollars, almost by accident.
Perc
ent o
f Web
Ref
erra
ls
25%
50%
75%
100%
2001 2002 2003 2004
Google Share of Referrals Yahoo Share of Referrals
Share of web referrals, Google versus Yahoo
WebWideStory
It was 1996. Searching on the web was clunky and inefficient because it was largely done using directories or engines that scanned pages for keyword hits. By 2003, a startup operating in a garage in Menlo Park, CA would disrupt the entire search engine market with an algorithm that ranked pages based on the quality of backlinks. That startup was Google.
Marketing technology companies founded each year
Percolate, Inc.
Google’s democratization of web information and discovery coincided with the rise of a new class of tech companies focused on online advertising.
Com
pani
es
10
20
30
40
50
60
70
80
90
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Social Platforms and Online Communities Advertising and Media Infrastructure
Marketing technology funding over time
Percolate, Inc.
And venture capital followed—for a time.
Vent
ure
Cap
ital (
USD)
$30M
$60M
$90M
$120M
$150M
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Social Platforms and Online Communities Advertising and MediaInfrastructure Total funding
The dotcom bubble - NASDAQ composite index
NASDAQ GIDS
The infamous dotcom bubble stifled venture capital and the overall growth of the industry. But Google’s approach to ranking based on backlinks also meant that popular experiences had an easier time generating momentum—and in just a few years, digital marketing would see another resurgence.
Stoc
k clo
sing
pric
e
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
1/4/1993 11/15/1993 9/29/1994 8/14/1995 6/26/1996 5/9/1997 3/25/1998 2/8/1999 12/21/1999 11/2/2000 9/25/2001 8/9/2002 6/25/2003
Stock closing price (USD)
Facebook monthly active users
Facebook, Inc
In 2004, Facebook launched out of a dorm room in Harvard, just a year after MySpace and LinkedIn got started. In the span of 4 years, Facebook went from 1 million users to a hundred times that—and things kept going.
Mon
thly
Act
ive
User
s
400M
800M
1,200M
1,600M
2,000M
12/1/2004 12/1/2006 10/1/2007 1/1/2009 4/1/2009 9/1/2009 2/1/2010 9/1/2010 2/1/2011 9/1/2011 4/1/2012 10/1/2012 3/1/2013 1/1/2014 7/1/2014 6/1/2015
Monthly Active Users (in millions)
Percent of online U.S. adults on social media
Pew Research Center
Social was more than just popular; it quickly became a central means of participation on the web. By 2009, about half of US adults online were on some social network.
Onl
ine
Adul
ts on
Soc
ial M
edia
25%
50%
75%
100%
2/1/2005 8/1/2006 5/1/2008 4/1/2009 5/1/2010 8/1/2011 12/1/2012 5/1/2013 9/1/2013 1/1/2014
Percent of Online US Adults on Social Media
Marketing technology companies founded each year
Percolate, Inc
Companies which focused on marketing software and infrastructure were founded rapidly after Facebook’s start. Social networks, which prioritized acquiring users over monetization, found themselves quickly supporting ads. A second marketing revolution had begun.
Com
pani
es
25
50
75
100
125
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Advertising and Media Infrastructure
Global Apple iPhone sales
Statista, Apple
On June 29, 2007, the first iPhone finally greeted long lines of customers camped outside of Apple and AT&T stores. Sales would surpass a million that fiscal year; by 2012, sales would surpass 100 million.
Appl
e iP
hone
Sal
es (M
illio
ns)
40M
80M
120M
160M
200M
2007 2008 2009 2010 2011 2012 2013 2014
iPhone sales
Percent of U.S. adults owning a smartphone over time
Pew Research Center
It was the start of broad-based smartphone adoption. By 2011, over a third of U.S. adults had a smartphone.
Onl
ine
Adul
ts on
Soc
ial M
edia
25%
50%
75%
100%
2/1/2005 8/1/2006 5/1/2008 4/1/2009 5/1/2010 8/1/2011 12/1/2012 5/1/2013 9/1/2013 1/1/2014
Percent of Online US Adults on Social Media
Time U.S. adults spend with devices a day
Mary Meeker’s 2015 Internet Trends Report
Connected mobile phones meant that users were spending more time than ever on the web—watching videos, sending messages, and on social media.
Hou
rs
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015
TV Other Connected Devices Desktop/Laptop Mobile
Monthly active users for top 4 social networks and messaging apps
BI Intelligence
Illustrating this shift, mobile messaging apps have become even more popular than the largest traditional social networks.
Mon
thly
Act
ive
User
s
440
880
1,320
1,760
2,200
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
Monthly Active Users on Big 4 Messaging Apps (WhatsApp, Facebook Messenger, WeChat, Viber)Monthly Active Users on Big 4 Social Networks (Facebook, Twitter, LinkedIn, Instagram)
Mobile traffic by application category
Cisco
Mobile’s constant connectivity and sundry applications has contributed to enormous amounts of data and web traffic. This surge in available information opened the door to new types of digital marketing companies.
Terra
byte
s Pe
r Mon
th
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2014 2015 2016 2017 2018 2019
Web/Data/VoIP Video Audio Streaming File Sharing
Marketing technology funding over time
Percolate, Inc
Quietly, VCs have been investing more and more in the companies building better mobile advertising experiences on top of social networks, or harnessing the large amounts of data these networks generate.
Vent
ure
Cap
itral
(Bill
ions
)
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Social Platforms and Online Communities Advertising and Media Infrastructure
Marketing technology infrastructure funding over time
Percolate, Inc
Historic amounts of venture capital is going into marketing technology that acts as basic data infrastructure.
Vent
ure
Cap
itral
(Bill
ions
)
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Cloud and Big Data Infrastructure for Marketing Marketing Technology Infrastructure
Number of connected devices in use
Percolate, Inc
The Internet of Things, where every day objects and machines are connected wirelessly to the web, will magnify and take advantage of those large amounts of data.
Devi
ces
in U
se (B
illio
ns)
5
10
15
20
25
30
35
2013 2014 2015E 2016E 2017E 2018E 2019E
Personal Computers Smartphones Tablets Connected/Smart Tvs Wearables Connected Cars Internet of Things
Global economic benefit of the Internet of Things
McKinsey Global Institute
Wearable devices, as well as connected cars, appliances, packaging labels, and other wireless objects will become increasingly common, changing the way people connect to each other, brands, government, and their healthcare services, while generating trillions in revenue.
Trill
ions
3
6
9
12
15
2015 2020 2025
Low estimate High estimate
Google, Facebook, and Apple changed the way we connect with one another, revolutionizing the digital marketing industry along the way.
Companies, entrepreneurs and venture capitalists will create new forms of marketing to take advantage of tomorrow’s connected world.
New hardware, software, and available information will transform all industries and disciplines—marketing, business, and health included.
A sample of approximately 1500 software companies from Scott Brinker’s “Marketing Technology Landscape Supergraphic” was analyzed and combined with publicly available financial and funding data to create these visuals.
Sources are cited with each chart.
Percolate is the system of record for marketing. Our technology helps the world's largest and fastest-growing
brands at every step of the marketing process.
Want to learn more?
Contact learn@percolate.com for more information
or request a demo today at percolate.com/request-demo