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Mobile CPM Rates: Trends and Best Practices

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Mobile

Average Mobile CPM rates reflect market supply and demand. They also can discourage publishers when they compare them to desktop CPMs.

Mobile CPMs and their ability to generate meaningful revenue remain a major challenge to digital publishers.

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.

A simple tip

Calculate and track the effectiveness of mobile CPM rates on a website by dividing the mobile CPM by the desktop CPM.

For example, publishers who use Google AdSense can click on Reports and Content Platform. On this site in a recent 30-day period, the page RPMs for mobile were running at 55 percent of desktop.

(RPM is revenue per thousand; CPM is cost per thousand. RPM is a publisher label, while CPM is an advertiser libel, but they track the same numbers.)

Another site had an average mobile CPM rate at 51 percent of desktop.  Although it’s possible to increase these ratios, mobile devices have limits to what they can display, so there are limits as well to improving the ratios.

CPM Estimates

It’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.

Because so many factors go into the actual mobile CPMs, it’s wise to make relative comparisons rather than look strictly at just CPMs.

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 (known as anchor ads) at the bottom of the mobile device 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. Responsive ads display whatever fits.

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.

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