How Much Does Mobile Advertising Cost
We sell mobile advertising on a CPC or CPM basis. Let’s run through some basic terminology to make this easier:
- CPC: Cost Per Click – You pay every time somebody clicks on your ad.
- CPM: Cost Per Thousand Impressions – You pay every time somebody sees your ad.
- CTR: Click Through Rate – The percentage of people who click on your banner ad.
- Impressions: A user who sees your ad.
You can get our average mobile CPM ad rate sheet here. The effective CPM (the amount you actually pay) is around the 30-50% of the bid price.
The CPM is priced in groups of 1000 impressions. For example, if the average CPM price is $0.25 and your ad is served 2000 impressions, then you’ll pay $0.50. However, if it is only served 500 impressions, then you’ll pay $0.125.
Under CPM Bidding, you should always aim for a high CTR so you can get as many people to view your ad for the lowest cost per click price possible.
Our bidding platform operates on a Maximum CPC Bid basis. For example, if you bid $0.50 per click, we will bid all amounts up to that price. In effect, we will bid $0.01, $0.02, $0.03… $0.48, $0.49 and $0.50 – we will not bid above the $0.50 bid price.
The CPC price is converted to a CPM rate on the backend. It is calculated by the CPC Bid divided by the CTR. For example, if you bid a CPC of $0.05 and you achieve a CTR of 0.50%, then you’re eCPM is $0.25.
As the exchanges only accept a CPM price, you need to either increase your CPC bid or your CTR on your banner ads. This will raise your effective CPM and expose you to more traffic. If you increase your CTR, then you will not pay more for each click. However, if you increase your CPC Bid, then you’ll pay up to that bid price.
We always recommend people advertise on a CPM basis as it is more stable and it’s easier to get access to placements with naturally lower click through rates. You can launch your mobile campaign on our platform by visiting: http://dashboard.adivity.com