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

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