Average Mobile CPMs reflect market supply and demand. They also can be discouraging when compared to desktop CPMs.
Recent CPMs have remained relatively flat while the total available inventory has grown at a strong rate, according to eMarketer.
The same company estimates that mobile will consume more than 50 percent of total digital spending in 2015 for the first time.
Mobile publishing presents four specific challenges for anyone wanting to generate ad revenue:
- Mobile CPMs are much lower than desktop CPMs.
- Information is limited on how to establish mobile rates and rate cards.
- Mobile revenue is not high enough to justify large investments in mobile publishing.
- Creative options are far fewer than desktop.
CPM EstimatesIt’s important to have a clear definition of mobile advertising platforms. Some reports combine tablets and mobile devices, while other limit it to just mobile.
As a result, various estimates range greatly because of how they define mobile. Many of these estimates do not come from reliable or credible sources. Rates also vary based on the size of the screen.
Adivity.com reports that the average CPM for mobile on the Apple operating system, IOS, is $2.09. The company also reports that the CPM on Android devices is $1.01.
Mopub.com reported average CPMs of $1.12 for IOS and $0.81 for Android for the month of December 2014.
One source that is reliable and credible is any ad network, such as Google AdSense, that provides a breakout of CPMs by platform.
Because so many factors go into the actual mobile CPMs, it’s wise to make relative comparisons rather than look strictly at just CPMs.
One group of about a dozen sites over a recent three-month period showed that CPMs for desktop and tablets were the same while CPMs for mobile were 38 percent of of desktop and tablet.
In other words, a site with a $5 CPM in a desktop position might charge $1.90 for a mobile ad position.
Another group of sites with an emphasis on news showed that mobile rates were running at only 15 percent of desktop.
The factors that impact the CPMs are worth exploring.
Factors Impacting Mobile CPMs
Just like desktop CPMs, mobile CPMs rise or fall based on the category, screen size, the creative, the size of the ad and the location of the ad.
Mobile ads perform worst at the bottom of the page because people often don’t scroll down all the way.
They perform only slightly better at the top of the page because visitors go to a page for information — not just to view an ad — and therefore scroll past the ad without looking at it.
They perform much better in the middle of the page after the visitor has consumed the information they seek and are ready to exit the page.
They perform best when anchored at the bottom of the display screen and remain visible no matter how much the visitor scrolls.
Overcoming the Challenges
Desktop advertising has several positive trends that are helping it with ad blindness and declining click-through rates.
They include larger ad sizes. The 468×60 has been replaced by the 728×90, which is being replaced by the 970×90 or 970×90 expandable. The 300×250 is being replaced by the 300×600.
They also include rich media options — Flash, video and other types of animation.
Mobile advertising doesn’t have such options with large sizes and expandables. So what does a publisher do?
Pursue volume and market share. It’s the Walmart approach to advertising — get as many customers as possible with low prices and count on volume to generate the necessary profits. Invest in product and marketing at the right pace.
Wait for rates to rise further. Demand for quality sites will put upward pressure on rates. So will the increasing size of display screens.
Continue experimenting with creative and placement. Focus on improving click-through rates to justify higher prices.