A new report predicts that tablets will emerge as the primary platform for mobile ad revenue in the next two years as a result of their larger screen and the more immersive media experience. The Yankee Group study forecasts that tablets will account for 53% of mobile ad dollars in 2014 compared to 47% for mobile handsets. By 2016, tablets’ share of mobile ad sales will rise to 60%.
Ads within mobile applications in particular will help to drive growth.
Yankee Group found that a quarter (24%) of tablet owners clicked on ads while using apps, and 29% purchased extra content. “Although the stats show impressive levels of engagement, only a handful of players have mined this revenue opportunity,” stated the report, pointing to the gains of social gaming companies.
The study indicated tablets outperform smartphones across advertising, direct payments and in-app commerce. For example, tablet owners on average buy 1.7 paid apps per month compared to 1.1 for smartphone users. And 35% of tablet owners purchase digital media from online stores versus 21% on the smartphone side.
Reports Monday that Amazon plans to come out with several new tablet models in a range of sizes underscore the promise that major retail players see in using the devices to enhance sales.
News and information apps account for about 15% of tablet app downloads, while shopping and banking apps make up about 20%, boosting m-commerce. “Shopping apps are taking advantage of the larger screens and concentrated use associated with tablets,” noted the report. “Fashion brands are also ahead of the pack. Tablet-friendly commerce features used by luxury brands and retailers include virtual store tours and magazines with branded content.”
Video has also gained traction on tablets, with almost two-thirds of users watching video at least once a week, up from 48% last year. The key for traditional content owners is to think small in mobile. That means relying on revenue from micropayments and advertising (rather than subscriptions) and focusing on low-cost development, since mobile offerings will have shorter shelf lives.
“Publishers should make content easy to access through proprietary and third-party-owned apps. In TV, partnerships with mobile specialists are an efficient way for production divisions to rethink programming,” according to the report authored by Yankee Group principal analyst Jason Armitage.
He advises advertisers to plan tablet-specific campaigns to take advantage of the format. Rather than simply repurposing TV ads, they should create new spots suited to the short sessions on tablets. Marketers should also use insights gleaned from app and social media use to improve engagement with a brand or service.