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Tablets Fizzle while Smartphones Sizzle

Posted on Thursday, May 28, 2015 at 3:41 PM

It's time to scrutinize our high hopes for the tablet.

By William Dunkerley

Not too long ago, the prophecies were that, with tablets, we'd finally have an ideal platform for the digital magazine. Enough time has passed now for us to re-examine that notion with the benefit of practical experience. The result is a mixed picture.

The Good News

On one hand there is encouraging news. According to the UK Press Gazette, there's been a digital breakthrough. The newspaper reports that the London Times has gotten advertisers to agree "to pay the same rate for the tablet edition as print."

This speaks to one of the biggest challenges in digital magazine publishing. By and large, digital editions have not been able to command ad rates equal to print. Many advertisers know print's track record in producing bottom-line results for them. Apparently they're not so sure about digital's performance. That has reflected itself in their hesitancy to pay higher rates for digital.

How did the Times work the trick to get higher rates? According to the Press Gazette:

"The move to increase the price charged for tablet ads follows neuroscience research by News UK last year (tracking eye-ball movement and brain activity) which the company said proved tablet edition ads are at least as effective as the print equivalent.

"This has now been backed up by a further piece of research called Project Footprint which closely tracked the online and offline activities of 70 digital subscribers to the Times and Sunday Times. It claims to show evidence of the relationship between readers looking at branded ads on the tablet edition, mentioning brands in conversations, searching online and purchasing products."

The Not-So-Good News

That sort of casts a pall over the good news. The evidence isn't based on sales results produced by the advertising. All that "eye-ball movement and brain activity" sounds interesting. But if it doesn't translate into the ultimate success of an ad, who knows whether or not the higher digital ad rates are justified?

The Press Gazette reports that the higher digital rates were negotiated "with a number of key ad agencies." But if the accession to higher rates is merely based on being cajoled by the publisher, it's hard to see how this situation can be sustained for long. If the advertisers (not their agencies) discover they're not getting sufficient payback from digital advertising, the bubble is likely to break.

There's been a lot of tall talk about the proliferation of tablets. Statistica.com presented a forecast that took the US penetration rate for tablets from 1.2 percent in 2010 to 20.7 percent in 2014. In a more recent forecast, eMarketer is projecting that tablet penetration in 2015 will reach only 15 percent.

Worse yet, the rate of growth is plummeting. While eMarketer claims 2013 saw a growth rate of 54.1 percent (worldwide), it forecasts only 17.1 percent for this year. By 2018 the projection is just7.9 percent.

Last year IDG asked, "Why have iPad sales fallen so significantly in such a short time?"

A Trend toward Smaller Screens?

While tablet penetration is hovering in the low double digits, smartphones are practically ubiquitous. ComScore reports that for the first quarter of this year 77 percent of the US population owned smartphones. Undoubtedly smartphone growth rates will be topping off. That's because the penetration rate is climbing so high.

The French news agency AFP reports that the smartphone is already the "third most owned electronics item for Americans." Top spot is occupied by televisions at 97 percent.

The drastically declining growth rate for tablets, however, is not because penetration is reaching the top. It seems to be a matter of the relative consumer utility for the two devices, smartphones vs. tablets.

What does this all add up to? At least on the surface it looks like consumers are gravitating to small-screen devices. Many magazine publishers, though, are still producing large-screen products.

This suggests we should start scrutinizing the efficacy of our publication formats.

It seems to me that the idea of the tablet magazine was driven by device manufacturers and by publishers who saw it as a way of migrating a print-looking product onto a digital platform. It was an engineered solution as opposed to something that emerged from the marketplace. Now it seems like the consumers are speaking and telling us what they prefer. Are we listening?

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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