Forecast: Tablet ad spending will eclipse smartphone spending over holidays

Spending on mobile advertising campaigns optimized for tablets is expected to increase 25 percent during the 2012 holiday season, surpassing spending on campaigns targeting smartphones for the first time, according to a new forecast from performance marketing agency M&C Saatchi. Over the last six months, tablet ad spending has generated an average conversion rate four times greater than mobile handset-based campaigns, M&C Saatchi reports, adding that when targeting is introduced in conjunction with creative campaigns, tablet conversion rates increase five-to-six times higher than phone conversion rates. “The possibilities to deliver rich media and interactive messaging lead to far better creativity in campaigns,” said M&C Saatchi CEO James Hilton. “This medium blends the best of TV with the best of interactivity. Virtually all brands have seen the benefits of larger screens to engage and be more creative.”

Retailers looking to capitalize on the tablet opportunity should run socio-demographic targeted campaigns and ensure their websites are optimized for larger-screen devices, M&C Saatchi states. The firm notes that location targeting is not yet a significant factor in tablet campaigns, however, with fewer than 10 percent of its tablet promotions leveraging exact geo-targeting. “For the most successful tablet campaigns, other targeting methods such as country or city geo-targeting, demographic, language, time of day and channel targeting is proven to be more important with these devices,” the agency contends.

M&C Saatchi predicts the trend will change as smaller 7-inch tablets go mainstream, suggesting ‘The ‘tablet in your pocket’ will mean exact geo-targeting will become incredibly powerful.” Rumors indicate Apple (NASDAQ:AAPL) will launch a smaller version of its bestselling iPad next week.

M&C Saatchi offers mobile strategy, mobile production and mobile media planning and buying services spanning mobile platforms including Apple’s iOS, Google’s (NASDAQ:GOOG) Android and HTML5. Clients include Yahoo, Reebok, BMW, Harper Collins, HSBC and Dior.

Forty-seven percent of tablet owners engage with mobile ads on their device more than once a week, according to a survey conducted this summer by the Interactive Advertising Bureau–in comparison, just one in four smartphone users interact with ads at the same frequency. In addition, 89 percent of tablet users are extremely likely to take action after engaging with a mobile promotion, as opposed to 80 percent of smartphone users. Earlier this week, mobile advertising platform Mojiva launched Mojiva Tab, a new ad network exclusive to tablet devices.