Marketers spent 16% more on search budgets in Q1 in the U.S. and 3% in the U.K. compared with the year-ago quarter, according to a report published Monday. The Adobe Systems Global Digital Advertising Q1 2012 Update reveals that ROI for campaigns in the United States rose 11% in the quarter compared with a year ago. Finance and automotive demonstrated the most increases, while the retail sector fell 5%. The minimal increase in U.K. search spend reflects the fragile state of the European economic recovery. Marketers also spent more on mobile campaigns; they allocated 8% of all search spend in the U.S. and 11% in the U.K. Of this, tablets accounted for 4.25% of search spend. Because costs per click (CPC) on tablets came in lower compared with those on desktops, despite comparable conversion rates, mobile and tablet advertising investments will become more appealing to advertisers in the short term. Justin Merickel, director of product innovation at Adobe, said conversion rates on tablets are stronger than PCs, but that's not true for search on handsets. "It outperforms desktop search," he said. The tablet is driving the increase in ad spend. It has grown from virtually zero in May 2011. Spend on tablets now exceeds smartphones, with the inflection point occurring in October 2011. As for Google, CPCs fell 5% year-on-year, but Bing and Yahoo rates rose 18% as marketers took advantage of better returns per clicks. As a result, the ROI advantage over Google no longer exists. When Yahoo Japan converted to the Google ad-serving platform from Bing-Yahoo, CPC rates dropped significantly, according to the report. Changes to Google's search algorithm contributed to growth in marketers spending more of their budget on search. The report suggests that increases resulted from an increase in click volume rather than an increase in CPC rates. While it has been true for the past two quarters, it is contradictory to trends in prior quarters. The report suggests that "algorithmic changes to Google in Q4 2011, such as increased site links, have led to a greater proportion of branded traffic that does not impact CPC rates." Analysis from the Adobe report suggests that U.S. marketers will continue to allocate more of their budgets to search for the remainder of 2012. The study points to an uptick between 10% and 15% in the amount spent by marketers on search as a bellwether for the state of the U.S. economy. The Bing and Yahoo alliance is at risk of losing market share, per the report. For the past few quarters in the U.S., the duo produced higher RPC rates and ROI compared with Google, but the advantage the two had diminished this quarter as a result of declining CPC rates on Google and an 18% CPC increase on Bing and Yahoo. Bing and Yahoo must continue to increase reach to obtain more click volume and focus on reducing CPC rates to sustain market share and regain market share lost to Google. Today, mobile devices get about 8% of search marketing budgets. The report suggests that tablets and smartphones will take a larger share, reaching between 15% and 20% by December 2012; the growth driven by an interest in other digital marketing channels yielding the same ROI as desktop search, only with lower CPC rates. Brands will continue to double the Facebook fan base in 2012, but CPC rates on the site should decrease. While Facebook ad CPC rates rose 40% sequentially for the past three quarters, CPC rates on Sponsored Stories tend to be lower than Marketplace Ads, which may contribute to temporary decreases, according to the report. Data for this report comes from the former Efficient Frontier, acquired by Adobe in January 2012.
With Conde Nast, Hearst and Meredith launching their own digital newsstand in the form of Next Issue Media, it’s clear that magazine publishers are counting on tablets for future growth. Forecasts predicting rapid tablet adoption abound. eMarketer, for instance, projects that U.S. tablet penetration will increase from 10.8% in 2011 to 27.7% in 2014. Separate findings from Gfk MRI show that nearly three-quarters of tablet owners (71%) are interested in reading magazines on their device. But a new report from Kantar Media suggests publishers will need to upgrade ad offerings in tablet editions to fully exploit the new platform. The Kantar study looked at 150 top magazines, of which 110 had an iPad app and 65 had versions specifically designed for it with exclusive digital content. That sample also included 42 magazines with versions tailored to the iPhone, a news feed format, the Zinio Magazine Reader or a separate news reader app. Among magazines with iPad editions, more than 90% of advertisers also ran ads in the corresponding print ones. Established advertisers are migrating to tablets, serving as the test bed for initial ad experiments. Regardless of what deals were cut, Kantar credits publishers for continuing to build relations with brands by extending them to tablets. At the same time, however, iPad titles carried far fewer ads than their print counterparts. The average ratio was about 60%, but ranged from less than 10% to more than 150%. Given that magazine apps are still at an early testing stage, the study reasoned it was too soon to conclude that the lighter ad load in tablets will remain a constant feature. Conspicuously absent from iPad editions were pharmaceutical ads -- a mainstay of print magazine ad pages. Kantar attributed the absence of prescription drug advertising to the stricter requirements that pharma advertisers face online to provide detailed disclosures about their products. A wider problem -- and one publishers and advertisers have more control over -- is the lack of ad creative that harnesses the full interactive capabilities of the medium. “In general, most magazine tablet ads were repurposed print creatives without elaborate animations or advanced interactive features, other than links to the advertisers’ Web site or social media pages like Facebook, Twitter and LinkedIn,” stated the report. The study found, for example, that less than half of iPad titles provided both portrait and landscape orientation for ads. One exception was a Honda CR-V ad in which the headline, background artwork and product shot all changed when the iPad was rotated from portrait to landscape view. Auto advertisers were the most likely to leverage rich media functions in ads. Another was a Scion ad appearing in Wired allowing readers to access image galleries, video and animation as well as the ability to lift, rotate or shake the iPad to interact with an ad. Ads with deep interactive elements tended to appear mainly in publications like Wired or Popular Science, aimed at a more tech-savvy audience. Those two were also among the first titles to launch iPad editions when Apple introduced the device two years ago. The study similarly identified a handful of ads that contained overlays to view additional product information. A Converse ad, for instance, had two calls to action: one tap for details on its clothing line, and another that took users to a Bloomingdale’s shopping page. If more dynamic ads like Converse’s were few, house ads turned up often. They typically cross-promoted another app by the same magazine brand or publisher. The abundance of house ads also underscored the relative dearth of third-party ads in iPad titles.
After watching its Android operating system struggle in a tablet market dominated by the iPad, Google may be ready to introduce its own hardware into the fray. According to tech blog The Verge, a device co-branded with hardware maker Asustek could reach consumers as early as July. The 7-inch tablet is expected to run the forthcoming tablet-optimized version of Android, version 4.0 or “Ice cream sandwich.” The report claims that Google is trying to pack a lot of horsepower into a bargain-priced frame in order to distinguish itself. The hardware specs include a Nvidia Tegra 3 quad-core CPU to deliver better performance than the dual-core processors driving lower-end tablets. Verge reports that Google is trying to price its hardware at least on par with the most successful Android-based tablet to date, Amazon’s Kindle Fire. The Fire runs a “forked” version of the Google OS that keeps users within Amazon’s own walled garden of approved apps and billing system. The move underscores the growing competition between Google and Amazon for the second tier of the tablet market. Google’s recently revamped Android Marketplace, Google Play, now includes the eBooks, movie rentals and TV programming that mimics Amazon’s multimedia e-store. Google wants to open up a viable Android tablet market in its larger competition with Apple in the space. So far, Google has not been able to leverage its open platform OS in tablets in the same way it has so successfully in smartphones. While tablets from Motorola, Asus, Samsung and others have come into the market at small and large screen sizes, none has gotten serious traction with consumers until Amazon introduced its low-priced but more closed Kindle Fire. Amazon succeeded with the Fire largely because it could fill the device catalogs with troves of multimedia content and not rely on the scant number of tablet-specific apps in the Android market. In developing its Play market, Google appears to be following Amazon’s lead in giving all devices -- but especially tablets -- a range of content for buyers to consume. But Google has not had much success selling devices directly to consumers, even if its brand helps raise the profile of hardware sold by partner OEMs. Its past attempts to jumpstart the Android smartphone market with the original Google G1 phone and the more recent NFC-enabled Nexus have been relatively ineffectual as direct-to-consumer plays. On the other hand, bringing the Google name to the wide range of Android hardware from so many vendors in the market could help give the fragmented market greater clarity. Market researchers ABI and IDC both have predicted that in the coming years, low-priced, Android-powered tablets will erode Apple’s share of the tablet terrain. ABI has predicted that the worldwide appeal of sub-$400 tablets will give the Android OS 60% of the market by 2016. Apple appears to be increasingly aware of the low end of the market. With the introduction of the newest version of the 9.7-inch iPad starting at $499, Apple elected to keep its previous generation of iPad 2s in market at a lower $399 price point. Rumors persist that the company is also testing a smaller version of the iPad that is at the larger end of the 7-inch scale. Steve Jobs famously chided the early Android 7-inch devices as being too small for efficient and enjoyable touch interactions with tablet-scale experiences.
Five. That’s how many screens are in my life most days. There’s my work computer, my most meaningful LCD relationship. And then there’s my laptop, which I drag around on errands and often carry from room to room in the house. Then there’s my iPad (my preferred vehicle for Netflix, Facebook Scrabble and a fun app for the gym). I’ve got an Android smartphone and a plain old TV. (Yes, just one. It migrates from the living room during football season to the bedroom for the rest of the year.) Toss in all the screens I pay for (those college kids like their laptops, smartphones and TV sets, too), and the numbers shoot up. Now add in all the screens I casually encounter in a day — so far today, that’s one at the gas station, one at the supermarket and one at the pet store. I’m well into the teens, and it’s barely lunchtime — and I’m a low-tech person! That’s why working with Adam Broitman and John Swords, the big brains behind Circ.us, and the guest editors of the wonderful, 22-page “All the World’s A Screen” section of this magazine has been so inspiring. The pair, who have done groundbreaking tech work for such clients as Ben and Jerry’s, Cisco, HBO and Red Bull, brought all kinds of creative thinking to this project. Thanks to them, and this oh-so-19th-century magazine you may be holding in your hands, you’ll never look at the screens in your life quite the same way. And by creative, I mean well beyond the usual marketing definition. They’ve commissioned a great piece of fiction by John C. Havens about augmented reality. Brought in five visuals artists, who have provided a whole new way to look at the use of QR codes, which invite not only visual but also sound and music into the print experience. They’ve covered the growth of social TV and the many ways in which the future of screens is already here. To experience the ways they’ve brought all these screen under Circ.us’ giant tent, turn to page 45. Grading By Genre: Our TV Report Card And for those of you itching for insights into the plain-Jane screen that is regular TV — which let’s face it, for most of us, is still sort of the Mother Ship of All Screens — we corralled some of our favorite writers to weigh in on the state of programming. They give us a report card of how well the world of news, drama, comedy, sports and reality have done this year. Turns out the NFL, the Arab Spring and Breaking Bad have been good for plenty of us. (Nor am I the only one dismayed by this century’s reinterpretation of Charlie’s Angels.) They even step a few months into the future, predicting what all of us might see when that circus known as the upfront season comes to town. On page 40, Stephen McClellan takes a closer look at what TV companies and their clients are calling integrated media, the catch phrase for the increasingly nimble ways they are finding to link the 30-second TV spot—still the industry’s core currency—across multiple channels. That’s not just following soccer fans, for example, across all their screens. It even includes using your car’s GPS to play a video games on your phone, linked to the latest episode of your favorite show. And don’t miss Erik Sass’ update on how the digital-out-of-home industry is dealing—or perhaps not dealing—with the still-sensitive issue of facial recognition technology. Scared off by potential legal and privacy problems, marketers have instead focused on the promise of near-field communications, but thanks to Intel, that may soon be changing. And before you roll your eyes with that, “Who cares — TV is dead” thing, turn to page 37 for Carrie Cummings’ insightful Q&A with Magnaglobal’s Vincent Letang. Not only can he explain the delicious concept of “video snacking,” he predicts an increase of 6.8 percent in TV revenues in the year ahead (or 2.4 percent without the Olympics or the elections). Even better, it’s still stealing market share from print, radio and newspapers. At least for now, cancel the wake and head to the circus.
Ever clicked on a video link on your mobile phone only to encounter a video that - gasp - didn’t play? Yep, thought so. Me too. Even in this mobile-centric day and age, I still run across videos that just don’t start on my smartphone, or videos that require the viewer to scroll back and forth across the screen. But brands and businesses should do whatever it takes to optimize their videos for mobile devices because consumers are increasingly watching product videos on their handhelds. About half of smartphone users and 61% of tablet owners have watched product videos on their devices in the last three months, according to an Invodo study conducted in partnership with e-commerce consultancy the e-tailing group. “Tablets may have greater long-term potential for effectively delivering the product videos that today’s consumers currently gravitate towards,” the study said. “Monitoring all mobile devices will be important as ‘devices’ grow in importance and forever alter the daily lives of shoppers.” The study surveyed consumers who had watched product videos. Of those, about 60% said when they encounter a video on a retail site they watch it, and about one-third have watched five or more product videos. Perhaps even more promising for brands — product videos are being watched in many categories, such as auto, consumer electronics, music/DVD/videos, toys/video games and computer hardware/software. Okay, so maybe we aren’t watching too many videos on how to apply deodorant or get a better brushing from your toothpaste. Even so, the appeal of videos for more complicated or sophisticated products is fairly broad. Videos that are educational or instructional in nature draw the most viewer attention. About one in three consumers watched educational or instructional videos for more than three minutes.