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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:

  1. 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.
  2. 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.

  • http://www.3arn.net/ Abdul

    Guess they’re not worth it after all, It would be better if Apple would start selling off Advertisements on iPhone and iTouch, they could generate big revenue from that!

    Abdul’s last blog post..Whos.Amung.Us taking Web Stats to a Whole New Level

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    I think mobile ads wont be really worth it or effective for a couple years at best, they have a lot of refining and customer base they need first.

  • http://www.spike.com/blog/wii-fit-personal/71786 Wii Fit

    For my point of view it is worth.

  • http://inventorymanagementsoftwares.blogspot.com manager

    Hi carrie,

    I think, its depend on the marketing strategy. To cut down the ads cost, we have to write the ads as specific as possible. in other words we have to identify the targeted market.

    Regards.

    manager’s last blog post..Inventory Management Software System