Mobile Ad Rates Down 25%-40% This Year: Report


It’s getting cheaper to advertise on the mobile Web: Mobile ad rates have fallen some 25% to 40% this year, according to AdAge’s Rita Chang.

AdAge: According to industry executives, mobile CPMs, or the cost to reach 1,000 consumers, now average about $15 compared with the average earlier this year of $20 to $25. And with the out-of-the-box, $40 to $50 CPMs of last year more or less history now, pricing is beginning to normalize. …

The economy isn’t the only factor at work here: Also in play is the onslaught of inventory coming online as more brands beef up their presence in wireless; the proliferation of handset applications; and mobile applications for social media. With consumers spending more time on their increasingly advanced phones, it’s all a sure recipe for an explosive ramp-up in mobile ad inventory.

This sounds about right to us. Most normal Web sites can’t get near a $15 CPM, so we can’t see why the mobile Web — where the browsing experience is much poorer — would get those rates. (Not to mention that many initial mobile Web advertisers, like ringtone sellers, are having a tough time these days.)

We think volume will eventually more than make up for the lower rates, if it isn’t already. But there’s going to need to be a lot of volume if the online ad market is ever going to come close to the Web ad market — like some companies, including Google (GOOG), are dreaming.

See Also:
Google Goes After Mobile Ad Companies With AdWords For iPhone, GPhone
MySpace Bringing Video, Ads (And Prayers) To Mobiles
Microsoft Tries To Steal Google’s Verizon Mobile Search Deal