"When tablets first came out, and by that we mean the iPad, the
sleek machines were primarily used for reading, watching video and playing
games. Consuming stuff, in other words. Those activities are still a big part of
how tablets earn their place in our lives, but a recent study suggests that more
and more, tablets are being used more actively, to research and buy all kinds of
stuff - formerly the province of the personal computer.
By the end 2013 tablets will account for 20 percent of Google's
paid search ad clicks in the U.S., up from 6 percent in January 2012 according
to research by Marin Software, a San Francisco-based company that helps large
advertisers manage their online advertising.
And it's not just the volume of the tablet clicks that is
rising, it's also the value.
Last year the average cost per click of ads served up on
tablets rose 25 percent, ending the year at 62 cents. Desktop rates rose 9
percent to end the year at 75 cents per click. (Smartphones lag the bunch at 48
cents per click).
The gap between tablets and PCs won't last long, says Gagan
Kanwar, director of research at Marin Software and the author of the report.
Kanwar gathered his data from a cross section of clients that spanned industries
and geographies, spending in aggregate more than $4 billion on paid search
"By the close of 2013, the cost per click of advertising served
up on tablets should equal that of desktops," Kanwar says. For Google that
should translate to $5 billion in paid search revenue from tablets alone.
The mounting evidence is that for a growing number of people,
the tablet has replaced the PC as a primary gadget for all kinds of computing
tasks. That seems obvious to those of us who just bought a tablet, or have
watched the fortunes of PC giants like HP and Dell flag.
But the big shift is that advertisers are seeing the evidence
too, and are increasing the share of their search advertising budgets earmarked
for mobile gadgets accordingly - almost doubling from 10 percent to 18.4 percent
in 2012 alone. By the end of this year, Kanwar says, mobile devices will account
for one-third of search advertising budgets.
Clearly, Google saw it coming. Better than most, the search
giant could see that tablet ads were performing just like the desktop. That is
why Google made the biggest change to AdWords in the last five years,
essentially removing the distinction between desktop and tablet ad campaigns.
"They are basically saying from our point of view desktop and tablets are
converging," Kanwar says.
Which begs the question: if the tablet is becoming the PC as
far as advertisers are concerned, what is the smartphone?
For now it is a separate animal, Kanwar says. In the United
States half of tablet searches are net new searches, the other half are
cannibalizing a desktop or notebook PC. Searches from smartphones are all gravy,
or in slightly drier terms, incremental - searches for restaurants, movie times
and clothing that wouldn't otherwise happen.
The race to find a way to make smartphone advertising pay is
just beginning. Seeing as it involves, Apple, Facebook, Google, Microsoft and
every internet giant (or would-be giant) it's going to be a demolition
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