Business

Mobile Ad Rates Fall As Inventory Grows

Mobile ad rates are dropping, and fast. The slowed economy and an influx of mobile ad inventory have caused ad rates to drop by more than half over the past year. The average cost to reach 1,000 mobile consumers (CPM) is now down to $15. A few months ago it cost between $20 and $25. […]

Mobile ad rates are dropping, and fast. The slowed economy and an influx of mobile ad inventory have caused ad rates to drop by more than half over the past year.

The average cost to reach 1,000 mobile consumers (CPM) is now down to $15. A few months ago it cost between $20 and $25. Last year the average was between $40 and $50, according.

While this looks like bad news for mobile, it doesn't necessarily have to be that way. Analysts tell Ad Age that rates are stabilizing as the mobile space matures:

"The industry has matured quite a bit in the last couple of quarters to become a more efficient marketplace," said Lars Albright, VP-business development at ad network Quatttro Wireless. "One of the trends we're seeing is that the range has expanded and you can have everything from a low CPM all the way up to a mid-30s CPM."

Currently, mobile CPMs are costlier than online because mobile click though rates deliver much better response. The mobile click-through rate is about 1.5 percent versus 0.15 percent for online.
As more ad options appear on mobile phones, it makes sense that the impressions and — ad prices will — go down.