Consumer Electronics Market: Toying With Tablets1 Dec, 2011 By: Jackie Jones Response
The success of the iPad and subsequent tablet-driven trends in the consumer electronics space has not only given consumers new products to enjoy, but also provided marketers a plethora of opportunities to connect with customers.
When researching future purchases, it’s not her office, living room or even her favorite coffee shop amid the many locals buried in their laptops that Dianna Huff finds herself in most often. Instead, Huff, at her most influential moments, finds herself at parking lots, in her car, iPad in hand (and wallet ready, if the brand plays their cards right).
“Yes, I’m in marketing, but we’re all first and foremost consumers, and more and more lately, I find myself searching for stores and products on my iPad in the middle of a shopping trip or on the spur of the moment,” says Huff, a business-to-business marketing expert at DH Communications Inc. “If a company’s website is not mobile- or tablet-enabled, when all it will take for me to make a purchase is the address or phone number and a clear product description popping up on my screen, it frustrates me to no end.”
Huff is not alone in her sentiments. Estimates put the number of iPads sold to date at approximately 73 million, and that’s just one brand in the whole spectrum of tablet products. Consumer adoption of such devices is not only helping drive the development of consumer electronics, but changing the rules for how brands and marketers should best connect with customers in real time, right in the midst of their decision to purchase — not a second before, and definitely not any time after, when the impulse to buy might have passed.
And what more perfect time to capture consumers at the peak of their purchasing power than the holidays? Consumer electronics (CE) are the most desired gifts this holiday season, and spending on gizmos and gadgets will reach an all-time high this year, according to the Consumer Electronics Association (CEA). Consumers are expected to spend an average of $246 on electronics over the holidays, a 6-percent increase from last year and the highest level recorded since the CEA began tracking spending.
It’s no surprise to many that tablets lead the list of consumers’ most-wanted electronics this year, with E-readers landing behind only laptops and televisions, the CEA reports in its “18th Annual CE Holiday Purchase Patterns Study.”
“It is going to be a computing holiday season, with tablets looking to be the runaway success story,” Shawn DuBravac, CEA’s chief economist and director of research, said in an official statement accompanying the study. “New, innovative product categories like tablets and E-readers, combined with consistent favorites like notebook computers, video game consoles and televisions will make this a digital holiday season.”
Tablets of the Trade
The launch of Apple’s iPad has been one of many factors in a bevy of new product releases in the CE space, and consumer adoption and activity has been quick to keep pace with technological advancements. In addition to the iPad, the market has also seen the recent addition of the Amazon Kindle Fire as well as the Barnes & Noble Nook to the list of tablet products, and Android customers are expected to be offered new Xoom tablets soon, as well.
Barnes & Noble’s Nook serves as an E-reader and streams music and movies in high-definition, and users can read magazines, interactive books and use apps from Barnes & Noble’s Nook store, according to William Lynch, Barnes & Noble’s CEO, who touts the Nook as “the best media device ever created in a portable form factor.” Barnes & Noble is also releasing a new E-reader specifically designed for the iPad.
The Amazon Kindle Fire offers consumers more than 18 million movies, TV shows, books, magazines, apps and games, and utilizes touch-screen and Web-browsing capabilities to give its users true access to a limitless amounts of information on the go and in real time. The tablet is already the bestselling item on Amazon.com, and the company is building “millions more than planned” based on customer response so far, according to Dave Limp, vice president of Amazon Kindle.
Brands within the consumer electronics space and beyond — whether a retailer or product-specific marketer — are also taking notice of the vertical’s newest kid on campus, with many launching tablet-enabled websites and apps, compatible software, or even competing products themselves.
Adobe Systems is launching a new version of its digital publishing suite specifically for the iPad in the hopes of “influencing the economics of publishing on (the) iPad … making digital publishing available to businesses of all sizes — from freelance designers to small design firms to large global publishers,” according to the company, which could have far-reaching implications for advertisers looking to hone in on the tablet’s core audience. Adobe already offers the Photoshop Touch app for Android, which repurposes core Photoshop tools for tablets.
Whether it’s an iPad, Kindle, Xoom, or E-reader, consumers have made it clear that tablet devices are quickly joining the ranks of TV, computers and mobile as the newest screen vying for its share of the market’s attention. The question for those in direct response and other areas of advertising then becomes: What can it mean for marketers?
Power of the People
Ever since the Internet became mainstream and consumer adoption of advancing technologies more universal, advertising — especially direct response — has taken on a new, interactive element. Rather than simply calling an 800-number or visiting a website, the best DR marketers are enabling consumers to scan QR codes for deals, discounts and even simply entertainment purposes; post their own reviews and ratings on customer-driven sites; and have one-on-one dialogue via social media sites such as Facebook and Twitter.
The common factor in all of those is the real-time sense of immediacy that comes with the modern consumer’s drive to purchase, a trend buoyed by the instant access and on-the-go capabilities afforded by tablet devices. Most industry experts agree this puts more control in the consumers’ hands, and marketers must meet their customers literally wherever they go now.
“These devices are very personal, much like mobile phones, so there’s a unique opportunity for a very intimate connection with customers,” says Marc Jensen at space150, a digital agency with offices in Minneapolis, New York and Los Angeles. “Also, apps on these devices can track users’ actions very closely, providing very good feedback and what is or isn’t working or connecting with people.”
space150 takes a keen focus on helping its partners leverage iPads as sales and marketing tools, though the industry is still in the early learning curve of figuring out how to use tablets to market to the general public, according to Jensen. The company most recently unveiled a new iPad-friendly brand website for Cambria, a natural stone surface brand, that uses the iPad’s touch screen capabilities to flip through and demonstrate coordinated paint colors and fixtures to clients. It’s those types of advertisers who are finding innovative ways to leverage such consumer electronics that are reaching potential customers the best, Jensen adds.
“There are some examples of really innovative work in this space, especially in the product space,” he says. “Hyundai Equus owners receive an iPad with the purchase of the car now, and it’s a modern interactive take on the traditional auto owner’s manual. These types of things can really help create a better relationship with customers and are truly useful.”
While traditional advertising works well on a tablet, the real power will be seen when tying the advertising experience on a tablet together with the advertising on TV, according to Richard Bullwinkle, chief evangelist of Rovi Corp., which focuses on driving engagement with advertising across a plethora of screens from TVs to Internet-enabled “connected” devices and more.
“The most exciting innovations for advertisers are just about to hit,” Bullwinkle says. “See an emotional ad on TV, and the call-to-action on the tablet. See a soda ad on TV; get a coupon for it on the tablet or smartphone. See the cool sunglasses on the actress; buy them online with the tablet.”
In many ways, tablets are the latest innovation to bring the long-awaited interactive TV to life, Bullwinkle adds. About 31 percent of all Internet browsing happens while consumers are watching TV, and the more connected the devices, the more interesting it gets for marketers, Bullwinkle says.
“Say your cable box tells your tablet what ad you’re watching, or your tablet tells your cable box what products you like. Soon the consumer gets a very personalized ad experience,” he says. “That’s a win for the advertiser, and the consumer only sees products or services they’re actually interested in.”
Bullwinkle says Rovi is just scratching the surface of what tablets can do for brands and consumers, but has seen a lot of success in promoting video content while the consumer is in discovery mode, using recommendation engines to discover consumers’ viewing behavior and using that to drive sales.
Screened for Success
The perks of tablets and E-readers to advertisers looking to utilize CE developments to their benefit don’t come without their own set of challenges. Being cognizant of various intricacies — such as the fact that Apple doesn’t support Flash sites — and testing your site adequately across all platforms is especially important to make sure you don’t lose a consumer seeking out information from your brand on these devices, Huff says.
“Testing sites on all devices is where companies and Web designers are falling behind a bit,” she says. “They’re checking it on a variety of browsers, but always on desktops. Brands need to know what their sites look like on devices — whether the site is rendering correctly, can people click around, do drop-down menus work, etc.”
The little details can be of particular note to DR marketers, Huff says. Something as simple as making sure a phone number on a website can be called when a user touches the number on their screen, or making sure PDFs can be saved to users’ iBook libraries so consumers can read up on products and services at their leisure, can make the difference between revenue in the bank and a lost customer.
On the media buying side, the biggest challenge so far remains moving dollars from traditional buys to trying new things, Bullwinkle says.
“Everyone knows that buying a video ad in primetime gets millions of eyeballs. Buying a high-tech ad experience that links that TV ad to a tablet app and targets very key customers is more risky,” he notes. “It’s hard to build things without ad dollars, and it’s hard to put ad dollars toward something that isn’t yet known to be successful. As more companies test new technologies, we are finding out more about what the consumers wants and doesn’t want. Soon, those who haven’t experimented with new advertising technologies might feel left behind.”
And they might feel left behind sooner than not. Yahoo is one of the first major players to embrace tablet-specific advertising with its Living Ads, the search company’s new advertising product to be launched this fall. Creating increased engagement between brand and consumer is the core concept behind Yahoo’s ad platform, which also tracks data and metrics — such as the time the user spends interacting with the ad.
Yahoo has just begun talking to different agencies, and is optimistic about the future of tablet advertising, according to Paul Cushman, Yahoo’s senior director of mobile strategy.
“This is about taking digital advertising to the next level,” Cushman has said to the media about Yahoo’s Living Ads. “We think this combines the emotional impact of TV and sumptuousness of print. This is exactly what the Web was supposed to deliver years ago.”
As marketers more universally adopt DR tactics, and the need to ramp up advertising and connect with consumers in real time grows, consumer electronics finds itself in a unique position to not only grow as its own vertical, but also play a key role in giving marketers the tools needed to achieve unparalleled success across a variety of verticals.
“We’re in a time of great change, and that also means there is a huge opportunity to innovate and to lead,” Jensen says. “I think it’s a really exciting time to do new things and to connect with people in new ways. iPads, tablets and readers aren’t the only things to keep in mind; it’s a combination of all the screens, all the interactions and touch points, and about really focusing on the user.”
Year of the Tablet
Though Apple’s iPad has been on the market for less than two years, its influence on the consumer electronics space and consumer behavior has been insurmountable, according to industry statistics.
- Apple sold 8 million iPads last quarter — compared to 15 million iPads last year.
- The use of desktop computers is down for 35 percent of iPad owners since purchasing their tablets, and use of laptops is down for 39 percent.
- Eighty-seven percent of iPad owners use it every day; 26 percent of those use it for 30 minutes to an hour per day; 32 percent for 1-2 hours a day; and 24 percent for more than 2 hours a day.
- Seventy-five percent of consumers use their iPads to access the Internet, 29 percent use it to research products and services, and 19 percent use it to shop online.
- Sixteen percent of iPad users have purchased a branded app from a company, while 84 percent report being interested in an app from one of their favorite brands if it was available.