Redefining Mobile Advertising: Smartphones, Tablets Increasingly Have Separate Ad Budgets

Redefining Mobile Advertising: Smartphones, Tablets Increasingly Have Separate Ad Budgets

As the Samsung Galaxy and iPhone 6 have introduced larger smartphone screen sizes to the masses, folks don’t seem to be lugging their tablets around as much. But often a new statistic comes around to proclaim “mobile” will account for half of video consumption this year, without delineating between smartphones and tablets, to use just one example.

And then you can set your clock to tweets rolling in from marketers wanting to know why the research lumps the two kinds of devices together. Perhaps this is the source of such consternation: A quick poll of digital agencies suggests they’re moving ahead of researchers’ findings. 

“I’d say at least 80 percent, maybe higher, of clients today are creating separate budget lines for smartphones and tablets,” said Jeremy Lockhorn, vp of emerging media and mobile lead for Razorfish North America. “Generally speaking, when this generation of tablets first launched, they got bucketed in with mobile. But as we’ve gotten a better sense of how people use tablets, it’s clear that it is a different and distinct use case from smartphones. Now, nearly all of our clients are treating them separately.”

Tablets are actually grouped with desktop budgets rather than mobile spend “more often than not,” said Aaron Shapiro, CEO of Huge.

“The most sophisticated clients will have separate mobile and desktop budgets that will include mobile advertising work for tablet,” he said, “but this work will usually fall under the desktop budget.”

Somewhat conversely, another agency, which requested anonymity, said less than 10 percent of its clients create separate budget lines for tablet versus mobile. However, most of them allow the shop to optimize digital spending as it sees fit, which means regularly separating the two types of devices.

Tablet usage changes

Most people agree regular tablet use has declined among on-the-go consumers compared to one or two years ago. Research shows that people increasingly use their tablets at home. And worldwide tablet shipments fell 3 percent in the fourth quarter of 2014, the first decline since the devices hit the market in 2010. 

When people do take them out in public, it’s often to entertain a child during car rides or to watch shows on Hulu or Netflix during a trip. They’re typically not shopping in Target or Walmart with an iPad in hand or watching video on their Microsoft Surface in between meetings—they’re doing that on their phones instead.

So when ad industry players talk about “mobile,” are tablets still relevant to the conversation?

“Perhaps if we said ‘handset,’ that might make it easier to think about,” said David Eastman, managing partner, MCD Partners. “A smartphone is a handset, a tablet isn’t.”

Dan Swartz, svp of digital marketing, media and analytics at Upshot, said the tablet is losing its popularity even among the jet-set crowd, which loves to travel as lightly as possible. 

“The primary device for the traveler is moving to the newer, larger phones… because their bigger screens now deliver the experience consumers only previously expected from laptops or tablets,” he said. “You no longer need to juggle two devices.”

Added Ari Brandt, CEO of MediaBrix: “Marketers should definitely consider tablets a separate and discreet platform from smartphones because the user experience is different and the type of activities being conducted and content consumed are also very different.”

Researchers like Nielsen, comScore and eMarketer seem more and more tuned in to that reality.

“We already separate smartphones and tablets in as many of our figures as possible,” said Dan Marcec, a representative for eMarketer. “For basically all of our [mobile-commerce] and time-spent media usage stats, we have smartphone and tablet breakouts, at least in the U.S. Ad spending is the main example where we don’t because the two are still lumped together in ‘mobile’ by most advertisers and publishers in terms of budgeting and selling, respectively.”

In terms of his latter point, agencies like Razorfish and Huge would definitely disagree. But there are plenty of small differences of opinion about what constitutes “mobile” nowadays. Rye Clifton, product strategy director at GSD&M, conflicts with the aforementioned Swartz’s take on travelers and thinks that while re-categorization is afoot, hospitality marketers need to keep tablets in mind. 

“I see the lines blurring,” Clifton said. “Tablets are becoming more like laptops, but I don’t see them as ‘home devices.’ I see tablets more as travel devices for consuming content—an easier device to take on planes than a laptop, though not quite as great if you need to do a bunch of typing or editing.”

Meanwhile, tablet sales have flat-lined as “phablets“—mobile phones with big screens—are growing in popularity. The phenomena most recently has been led by the iPhone 6, which for eight or nine months has been a mammoth sales driver for Apple, causing marketers to rethink mobile. 

“For the moment, despite the slow merge of tablet and smartphone screen sizes, a user’s experiences on those devices are inherently different,” said Christian Schimke, director of creative technology, Partners + Napier. “One would like to assume that at some point, the smartphone screen growth would subside—hopefully bringing terms like ‘phablet’ down with it—and the distinctions become more solidified.”

Or they may become more fragmented.

Down the road several months, smartwatches and other wearables could change what “mobile” means all over again. But at least marketers will know that those devices won’t be used most by couch potatoes and tykes biding their time in the backseat. Read more here

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Note: The accepted formula that Auxiliary Mode Inc. uses to calculate the CPM range is $0.45 USD - $25.00 USD.

The range fluctuates this much because many factors come into play when calculating a CPM. Quality of traffic, source country, niche type of video, price of specific ads, adblock, the actual click rate, watch time and etc.

Cost per thousand (CPM) is a marketing term used to denote the price of 1,000 advertisement impressions on one webpage. If a website publisher charges $2.00CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad. The "M" in CPM represents the Roman numeral for 1,000.

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