What Factors Affect the Cost of Mobile Advertising?

R. Stamm

As with any form of advertising, there are a variety of factors that affect the cost of mobile advertising. The purpose of an ad, the target market, along with supply and demand are typical factors that affect the value of any marketing campaign. Channels and networks, or the destination of an ad, are more specific to mobile advertising with some channels costing more than others depending on the size. Another factor affecting the cost of a mobile ad is the way a marketer chooses to pay for ad clicks and whether or not the advertiser is trying to build a brand name. The type of device mobile advertisements are directed towards is also a significant concern when considering effectiveness and cost.

Mobile advertising may be displayed on a tablet computer.
Mobile advertising may be displayed on a tablet computer.

The ad network a marketer chooses is perhaps one of the most influential factors affecting the cost of mobile advertising. There are primarily three different types of networks used for mobile phone marketing and advertising. A blind network, a network that does not target a market and runs advertisements randomly, is the least expensive, but may not be as effective. Premium blind networks are essentially blind but offer service and advertising options for companies looking to build a brand or product name at a moderate cost. Premium networks are the most expensive and multinational corporations use them to build brand names in certain markets.

Companies often devise advertising strategies based on the age and gender of mobile users.
Companies often devise advertising strategies based on the age and gender of mobile users.

Another factor affecting the cost of mobile advertising concerns the nature of the ad that is run on the network. One of the most common is called a cost per click (CPC) advertisement. In this form of ad, the advertiser is charged each time a customer clicks on the banner advertisement. The cost per thousand impressions model (CPM) is an option used primarily for branding by companies with a larger advertising budget. Advertisers pay a fixed dollar amount for every thousand clicks on an advertisement or redirects to the company's website.

Businesses looking to expand into mobile advertising should consider the types of mobile phones they wish to place focus on. Most mobile advertising campaigns are directed towards phones with full Internet browsers, and the prices vary depending on the amount of exposure a business wants. Prices for these advertisements are about the same as the cost for those used on personal computer browsers. For phones without full Internet browsers, or wireless application protocol (WAP) phones, advertisements must be specially designed and may affect the overall cost of a campaign.

As with regular ads, the cost of mobile advertising can be impacted by factors including the size of the audience being reached, and the specific makeup of that audience.
As with regular ads, the cost of mobile advertising can be impacted by factors including the size of the audience being reached, and the specific makeup of that audience.

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Discussion Comments

Mammmood

@everetra - If you’re going after the mobile market, and not just any Internet user, you need to target websites that have mobile platforms – period.

These websites have “mobile” versions of their browsers which are streamlined to run on mobile devices. The problem is that there are not a lot of these websites around from what I can tell on my mobile phone, so the few that do exist will be expensive.

However, that’s the way you have to go if you specifically need the mobile user in my opinion.

everetra

@David09 - I can never imagine running an ad on a blind network except for some really generic product or service, like a company that sells shoes.

Well, I guess everyone needs shoes but not everyone buys them online. Even there, it would be better to target a market of athletes to get the best exposure for your advertisement.

David09

@hamje32 - I think that there are protections already in place. To stay with your example, the user who clicks multiple times will only be counted as once, from what I understand.

The advertising server has some scripts which enable it to detect the IP address of the user clicking the ad, to make sure it’s a “unique” click. At least that’s what I’ve heard. So I think it’s pretty accurate.

What is challenging for the advertiser is determining how much they are willing to pay for each click. From what I understand there is no set fee; it depends on your target market, are you targeting a broad market or a premium market, and what keywords you are using.

Some keywords are more expensive than others, so if you really want premium results you had better be prepared to pay.

hamje32

How cost effective do you think the CPM or even the CPC models are? They are measuring clicks, but what if the same user ends up clicking on the same ad over and over?

Worse, what if that user never bothers to buy the product? Then in the end you will have wasted a lot of money on one user who didn’t convert into a viable customer.

I think there needs to be safeguards of sorts to determine how well these models will work for you, if you plan to pay for them. Otherwise it might be better to pay fixed rates for static ads or something like that.

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