The Internet has profoundly changed how we communicate. But what often goes overlooked is how profoundly communication has changed the Internet, and so directed the flow of venture capital that has funded its biggest milestones.

Similarly, it’s common knowledge Google, Facebook, and Apple are billion dollar companies. What most don’t realize is how many other billion dollar companies those three firms laid the foundation for. Or how each one ignited a wave of technology adoption that, together, led us to today’s Internet — to the digital pathways and products that carry billions of conversations across the world each day.

Our latest study, The Marketing Technology Revolution: 22 Years in 16 Charts, shows how it happened. [And, for anyone interested in broader, lead-in context on how technology is adopted, please read our earlier essay on technology installation and deployment.]

A Wave on the Horizon

Twenty years ago, our canvas to talk to one another online was early email or a primitive message board. And the only way a business could communicate with us was a text ad or pop-up on a search directory like Yahoo.

Then in 1997 two Stanford PhD students invented an algorithm that calculated the importance of a website based on how often other sites link to it. That algorithm became PageRank, the company dropped its initial name “BackRub” in favor of “Google,” and the first wave of technology that created the modern internet was put in motion.

Wave 1: The Revolution in Search

While ranking websites based on their popularity and the quality of other websites linking to them seems intuitive now, when Google first commercialized the idea it quickly transformed a startup led by two scrappy co-founders in a Menlo Park garage into an iconic technology company. By the end of 2003, Google had overtaken Yahoo as the world’s number one search engine.

Smarter search navigation paved the road for Internet users to discover popular web experiences. It similarly allowed digital business communication and commerce to thrive. Cookie and context-driven ad networks, for instance, don’t work when people can’t find the pages they’re looking for, and Google itself entered online advertising in 2000 with the launch of AdWords, a platform that let companies target contextually relevant ads at its search engine users.

Google’s democratization of web information paved the way for a number of new technology startups that turned search-driven discovery into billion dollar businesses, including Yelp, Wikipedia, Wayfair, and ComScore. Overall, from 1993 through the collapse of the dotcom bubble and its initial rebound in 2003, communications technology startups raised an estimated $312 million in venture investment riding on the back of the momentum created by Google.

Marketing Technology Funding Over Time GIF

Google also shares responsibility for the creation of two early marketing technology categories: (1) marketing automation and (2) content marketing. The first, marketing automation, uses a network of persona and offer-specific landing pages to capture and add leads to rule-based email lists in order to re-market to them and build brand memory over time. Because landing page networks increase a [good] website’s indexable pages and attract backlinks, Google subsidizes successful marketing automation practitioners by sending them more organic search traffic (and, thereby, leads). Similarly, the first generation of effective content marketers emerged from the SEO (search engine optimization) community, who realized high quality brand publishing helped grow their business by creating a competitive advantage in search engine rankings.

Google’s approach to website and keyword ranking also meant that popular experiences had an easier time generating momentum and becoming pillars of the internet, including a new type of website: the social network.

Wave 2: The Rise of Social Media

In 2004, a year after the respective launches of MySpace and LinkedIn, Facebook emerged and quickly took college campuses by storm. Five years later, social was the epicenter of digital communication, and half of US adults online actively belonged to at least one social network.

Chart 5 - Monthly Facebook Monthly Active Users

The first phase of social media put its early leaders on a trajectory to become important media ecosystems. With Facebook’s launch of advertising in 2006 (the same year Jack Dorsey, Evan Williams, Biz Stone, and Noah Glass started Twitter), over 100 new tech startups were founded in that year alone to help businesses communicate better online, while venture investment in the space grew to $6.7 billion between 2004 and 2009. Similar to Google, Facebook was becoming a platform, an ecosystem of accessible audiences, APIs, and revenue pools for brands and entrepreneurs to build on.

Chart 7 - Marketing Technology Companies Founded Each Year

But social didn’t just create a new generation of ad-tech firms, it laid the foundation for many of the world’s most innovative — and valuable — companies. From Dropbox’s incentivized social referral system to Spotify’s use of Facebook profile authorization to create accounts that shared their listening activity with their networks, past and present day unicorns ranging from AirBnB and Groupon to Vox Media and BuzzFeed all used Facebook as a springboard to attract millions of people to their websites, alongside similar sums from VCs.

Wave 3: The Story of Everything in the Palm of Your Hand

Led by its brash, prodigious CEO Steve Jobs, Apple launched its first iPhone in 2007, signalling the start of today’s mobile world. By 2011, over a third of US adults had a smartphone — and with it, constant connectivity to one another, alongside access to nearly infinite information and entertainment.

Chart 8 - NUmber of iPhones Sold Globally

Three years later smartphone adoption doubled again; two thirds of Americans went out into the world each day with a magnificently compact computer right in their pocket.

Percent of US Adults with Smartphones

Mobile brought a new array of digital experiences to users, changing the way we communicate—even on social. Higher quality smartphone cameras paved the way for the meteoric rise of Instagram, while on-the-go geolocation enabled faster physical connections between people moving from point A to point B, courtesy of then-upstart Uber.

Later, an increased desire for digital privacy—plus a need to conserve memory inside a phone full of photos, videos, and music—allowed Snapchat to join both in the 100+ million users club. Attention spans grew shorter, conversations became more visual, and today more than 1.8 billion photos are shared on social every 24 hours. Messaging apps like WhatsApp and Facebook Messenger have even outgrown traditional social networks in terms of monthly active users, as mobile micro-conversations continue to reshape culture and human connectivity.

Messaging App Platform Growth

In the developing world, mobile’s economic opportunity is even greater — and more complex. Whereas Apple has carved out meaningful market share in the United States and Europe, global smartphone adoption is dominated by Samsung, Nokia, Huawei, and Xiaomi devices running Google’s Android operating system. In India, Android devices are 93% of the country’s smartphone market, slightly ahead of other major economies like Brazil where Android controls 90% share.

However, in the developing world, the economics of device manufacturers and traditional operating systems is less important than the economics of data. Because a 500MB mobile data plan can cost a smartphone owner two to four days’ wages in many parts of the world, the challenge isn’t smartphone adoption, it’s internet access.

Tomorrow’s Connections

Together, this profound, ongoing transition in how we communicate as a society could not have been possible without the three transformative waves in search, social, and mobile pioneered by Google, Facebook, and Apple.

And since the early 2000’s, the entrepreneurs and companies who understood how to successfully connect online audiences with each other and to advertisers within each of these waves unlocked billions of dollars in revenue and investment capital, leading to many of today’s most important technology companies.

Ultimately, just like earlier revolutions like the telephone and mass transit, these three shifts embody what people have always gravitated to technology for: the search for an easier way to get in touch with the person who matters most at that particular moment. Thanks to increasingly intelligent mobile devices in more people’s hands around the world, communication and media have never moved faster, traveled farther, or showcased as much diversity. These important transitions have also renewed and sparked new conversations about the connected global middle class, digital privacy, ad blocking, and corporate sustainability.

Chart 12 - Mobile Traffic by Application Category

And while the pace of change isn’t slowing down any time soon, it will also continue to create new ways for us to come together and share what we want to say—across borders, across cultures, across the near-infinite mural of the World Wide Web.

 

To see and learn more about the history of communications technology, visit https://percolate.com/history-of-marketing-technology. If you’d like to learn more about why we’re so passionate about technology’s global impact — and hear some of the brightest minds in the world share their thoughts on it — we encourage you to read the insights that came from Transition 2015 on the promise of modern marketing