A study by Ratecard reveals how the growing use of digital tablets is changing the way online advertisers are targeting consumers. In the longer term, retailers and service providers are likely to develop a multi-channel approach in order to attract their audience and convert interest into sales.
A study published by French magazine Ratecard, which specialises in information on digital advertising and media buying, highlights the market success of mobile devices as channels for online advertising. It seems that the long-awaited decline of the PC as the exclusive channel for online advertising is finally being confirmed during 2014. The PC click rate index is now clearly lower than that of both smartphones and tablets in the United States and in Europe. Moreover figures show that between 2012 and 2013, the cost per click (CPC) on mobile devices increased over 20%, compared with just 10% for PCs. However, in contrast with the United States, European consumers are somewhat reluctant to actually make purchases online using a mobile device, so conversion rates in 2013 stayed low – at around 2%, compared with 4% in the US.
Tablet CPC surging ahead of smartphones
Tablets are becoming the star channel for the online advertising market. Average tablet CPCs have now almost caught up with PCs ($0.76 per click compared with $0.83), while smartphones remain less attractive for advertisers with a CPC of $0.58. Moreover the conversion rate indexes for tablets and PCs are rather similar, with smartphones lagging behind in both the US and in Europe. According to Vincent Pillet, Managing Partner at Paris-based mobile marketing consultancy userADgents: “We need to ask whether tablets should be categorised as mobile devices or as PCs. The indexes could lead us to believe that tablets, especially the iPad which is used by the more digitally experienced population segment, are closer in nature to PCs than to mobile devices.”
Conversion rate: the experience counts more than the device
Meanwhile the conversion rate from first click through to purchase remains lower for smartphones than for PCs. In 2014, the conversion rate on tablets stands at 5.5% compared with 5.3% for PCs and 4.4% for smartphones. Better targeting and more secure purchasing systems – as for example with Amazon’s one-click buying functionality – help to explain the 67% growth in tablet conversion rates. Vincent Pillet also points out that “people use their smartphones a lot for browsing the web but actual purchasing depends very much on the context, the price and the sophistication of the app. A purchase may well begin on a mobile device and then be finalised elsewhere.” In fact the conversion rate indexes will become progressively less relevant as the buying process is increasingly shared across terminals. Moreover, “in addition to the choice of channel, advertisers are deploying other strategies, such as drive-to-store,” explains Vincent Pillet. This means that whichever device a customer uses, online advertising encourages him/her to go to a bricks-and-mortar store. At the end of the day, underlines Vincent Pillet, it is the user, not the device, that advertisers need to target.