The number of companies introducing new innovative technologies into their business is growing at a rapid rate.
Once reserved for the young, digitally-savvy start-ups or multi-nationals with the money to invest, digitalisation is now sweeping across every industry and being adopted by businesses of all ages and sizes.
It is therefore no surprise that the internet and digital media sector – grouped by an ecosystem of businesses operating across technology, social media, eCommerce, gaming, media and publishing – continued to be a highly active sector ripe for investment in 2019.
According to GCA Altium’s Internet & Digital Media Sector Q4 2019 Report, M&A transactions for businesses operating in this market accounted for some $20.3bn in the last year alone, while private equity and venture capital deals came to $12.7bn.
What’s more, at the end of 2019, a record 199 venture capital-backed companies in this sector were valued at greater than $1bn, compared to just 149 for the same time in 2018, telling us that growth is climbing year-on-year.
Investments are being used by internet and digital media businesses to build out their offerings and remain competitive in an increasingly crowded tech market, while larger companies are acquiring the scaling businesses to pool capabilities.
There are a number of trends that shaped the sector in 2019, evident in the high-growth unicorns that raised billions over the course of 2019, including online marketplace Airbnb and online personal finance company SoFi.
Continued rise of artificial intelligence
AI has taken the world by storm in recent years but it became somewhat of a norm for the masses in 2019. Companies around the world used AI to analyse consumer behaviour and search patterns, harnessing data to help understand how they find and interact with their products and services. This is helping consumer-facing businesses to transform their basic communication, product recommendations, content creation and e-commerce transactions.
Importance of personalisation
This goes hand-in-hand with the use of AI. Businesses know that customers are far more likely to engage with their brand if they offer a personalised experience. It builds loyalty, reduces churn and demonstrates a clear understanding of the customer, while also allowing the business to upsell and cross-sell products, which is why it is being adopted.
User-generated content 2.0
Seen as more engaging and trustworthy than traditional content, companies are turning to both interactive and user-generated content to build stronger connections. Company-created text-based content, quizzes and polls, augmented reality advertising, testimonials and customer videos are becoming increasingly popular as a means to reach younger target audiences.
Emphasis on conversational marketing
Consumers are demanding immediate responses when researching products and services, meaning businesses are turning towards conversational marketing to facilitate a one-to-one, real-time connection between themselves and their customers. Underscoring this trend, chatbots available on all devices and platforms are now becoming a must for most businesses.
Capitalising on micro-moments
Internet and digital media companies are increasingly rethinking the linear funnel of awareness, consideration and decision. Instead, many are opting to focus on building and achieving micro-moments, when a person turns to a device – usually a smartphone – to act on a need to learn more about something, watch something or buy something.
To conclude, it was all about a personal experience in 2019 and that is showing no sign of slowing down.
Companies of all sizes are recognising the need to understand their customers better and communicate with them in a way that is unique to them, providing the opportunity to retain more customers, attract new ones and ultimately, sell more products.
This is also reflected in finance and M&A figures for 2019 with these companies being recognised for market impact, and receiving significant investment to further develop operations.