Since their inception, both consumers and businesses have generally considered tablets mobile devices. The iPad interface certainly looks and feels more like the iPhone than a desktop. But does that make sense? How are tablets actually used? And, how will Google’s upcoming changes to Mobile in AdWords impact advertisers? Will they see lower ROI?
A 2012 Google study showed that the most popular places to use tablets are, in order, on the couch, in bed, in the home, at the table, and in the kitchen. Indeed, the first out-of-home location to make the list was the car, which occurred only 3% of the time. So tablets appear to be closer to laptops than mobile phones, at least in terms of consumer usage.
The mobile advertising advantage
This, not surprisingly, has an impact on how digital advertising performs across devices. Performance is significantly different for ads seen on smartphones, tablets and desktops. According to data compiled by Adobe, paid search conversion rates for tablets are 20% higher than desktops, and paid search conversion rates for smartphones are 42% worse than desktops. If you factor in that Cost-Per-Clicks (CPCs) on tablets are 30% lower than on desktops, paid search ROI on tablets is a whopping 70% better than desktops.
On top of that, tablet and smartphone traffic is exploding. Combined, tablets and smartphones already account for about one in five of all paid search clicks in 2012 and they could account for one in three by the end of 2013. For retailers, tablet traffic is growing at an even faster rate than smartphones. This is great news for marketers, especially when considering that tablet traffic converts better than both mobile phones and desktops, and is still pretty cheap.
Smart marketers want to exploit those performance differences and separately target tablets, smartphones and desktops. Many of our advertising clients are doing just that and experiencing nice incremental performance gains.
How is Google’s move impacting advertisers?
However, all of that is about to change. According to Google’s announcement today, advertisers can no longer target tablet users individually. Tablet users will be lumped in with desktop users, while smartphone users can be targeted differently through Google’s new “Enhanced Campaign” functionality. Advertisers can no longer create separate campaigns for desktop, smartphone and tablet targeting, but will instead be able to add a mobile modifier at the campaign level to modify bids on smartphone traffic. Google has made a clear statement to its advertisers: tablets aren’t mobile. But they’ve taken it a step further and effectively said that tablets are desktops.
Why the change? Well, as stated above, tablets really are used more like laptops or desktops than smartphones. Tablet traffic patterns are more closely tied to desktop traffic patterns than smartphones. In fact, tablet traffic actually augments the desktop because tablet traffic peaks precisely when desktop traffic drops. So tablet traffic is indeed more closely aligned to the desktop than the smartphone.
That’s just half of the story though. Currently, CPCs are lower for tablets given that competition for tablet traffic is still relatively low (but increasing). By lumping the higher performing tablet traffic in with desktop traffic, revenue per search (RPS) will increase for Google as CPCs increase on the combined desktop and tablet traffic. This, presumably, will address Google’s mobile monetization gap as an increasing share of searches is coming from tablets and smartphones.
The downside for advertisers in the long run is they may see lower overall ROI as these CPCs creep up. Adobe will certainly be watching this closely for our advertisers as this change rolls out in the coming months. As soon as the update is live, we will address it on both the technical and managed service sides of our ad business.
All Adobe clients leveraging our ad solution, Media Optimizer, for paid search optimization will be continually updated on all of the nuances of this change from Google. Despite the change Google has introduced, one thing is clear: tablets aren’t mobile. It’s a new world and we look forward to helping our advertisers navigate it. What do you think? Leave your comments and thoughts below.
About Adobe Media Optimizer
Adobe’s Media Optimizer solution is a fully integrated digital advertising platform that delivers cross-channel advertising management and optimization for peak return on investment. The solution delivers more than 300 million monthly prospects and customers and is used by more than 400 global customers across industries. Media Optimizer manages more than $2 billion in annualized ad spend.
Bill Mungovan is a director of product marketing and strategy for Media & Advertising Solutions at Adobe