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Tablet paid search will surpass smartphone search in the future: report

The popularity of tablets has caught the attention of marketers, with the share of paid search spend on iPad and tablet devices increasing 40 percent, according to a new report from Marin Software.

Marin Software's U.S. Online Advertising Quarterly Report found that while paid search is growing overall, tablet search is growing at a faster rate because of strong consumer adoption and favorable performance characteristics. As a result of this strong performance, Marin expects tablets to surpass smartphones in paid search in the future.

?As the adoption of tablets increases, we do see tablets surpassing smartphones in click share and ad-spend share,? said Matt Lawson, vice president of marketing for Marin Software, San Francisco.

?When that happens depends on the market penetration of tablets and advertisers investment in tablets,? he said. ?We anticipate mobile devices ? smartphones and tablets - will account for 25 percent of all ad clicks by December 2012 and tablets will comprise 45 percent of mobile clicks.?

Advertisers gravitate to tablets
During the second quarter, the share of paid search clicks on tablets grew 33 percent quarter over quarter.

While the growth rate for tablet paid search is impressive, the numbers are off of a small base. In March, paid search advertisers spent five percent of their budgets on tablets and by June that number had increased to seven percent.

One of the reasons for the growth in paid search on tablets is that, compared to ads shown on desktop and laptop computers, the cost per click for paid search ads run on tablets is 18 percent lower.

Additionally, the click-through rate for paid search ads on tablets is 42 percent higher.

?We attribute the growth of clicks on tablets to an increase in user adoption of tablets - more people buying and using tablets - a higher user engagement with ads on tablets compared to desktops, and advertisers investing more in ads on tablets - more ads being served than previously,? Mr. Lawson said.

?Increased advertiser investment in particular is a result of very favorable performance characteristics for search ads served on tables,? he said. ?These ads have a lower cost per click than ads served on computers, while offering a comparable conversion rate.?

Star performance from smartphones
Smartphones also continue to gain in paid search as they outperform other devices in important performance metrics.

The report found that in June 2012, the click-through rate for paid search ads was 2.07 percent on computers, 5.21 percent on smartphones and 3.22 percent on tablets while the cost per click respectively was $0.78, $0.49 and $0.64.

Overall, the share of clicks results from smartphones and tablets grew from 14 percent to 18 percent during the second quarter, with smartphones accounting for 10 percent of paid search clicks and tablets 8 percent.

The numbers suggest that there is an opportunity for advertisers in tablet paid search because of its relatively low cost and strong performance rates.

As a result, it is likely that paid search strategies will become more device conscious, with marketers directing their efforts specifically at tablet users. 
 
?In Q2 we saw smart phones continue to lead devices in click-through rate,? Mr. Lawson said. ?At the end of Q2, smartphones had a click-through rate 140 percent higher than desktops and 69 percent higher than tablets.

?Smartphones also carried the lowest cost-per click,? he said.