Inventory Up & Costs Down–Are Mobile Ads Worth it?
By: Carrie Hill
According to an article in AdAge last week – the CPM for advertising on mobile phones is dropping. At work is the economy of course, but also the inventory and available inventory – which climbs exponentially as more phones are able to display ads – and more brands are striving to capture that market.
Consumers are using their phones for so many things – taking advantage of their addiction is smart marketing – if you can get them to click. Earlier this year the CPMs (Cost per 1,000 impressions) were around $20 – $30 – those are down to an average of about $15. As more people get iPhones and 3G enabled handsets -the ability to show them advertising increases. If the inventory continues to increase the CPM prices should continue to drop. It seems to be a gradual decrease with no singular event causing the decline.
In my experience relevancy continues to be at issue here. If I query “restaurant 80010” on my Blackberry, I’d expect to see ads that are nearby. Twice I clicked on ads that would require at least 1/2 hr of driving in Denver traffic to find them. In many areas it’s going to be better to target a 10-block or so radius. I still don’t click on mobile ads and probably wont until I’m satisfied I’m going to be given information that’s nearby – not just in the same zip code. Until advertisers are more comfortable with the relevancy and accuracy of mobile advertising – the ROI will be shaky at best.
A minimum of two things need to happen before mobile advertising becomes main stream for the smaller more budget-sensitive clients:
- Relevancy needs to improve. I don’t want to show my ad for pizza delivery to a whole zip code when I only deliver to a 10-block radius. Until I’m assured this WON’T happen I probably won’t show my ad on a mobile phone.
- Proven ROI. Without a good idea of the return I’m going to see – throwing money at Mobile Advertising is a bit of a gamble. In the current economy gambling with money is a bad idea. Spending money where you KNOW it will make you money is a smart idea.
Carrie Hill is the SEO Team leader for Blizzard Internet Marketing where she specializes in optimizing travel, tourism and accommodations websites.