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How much does it cost to advertise on a mobile app?

3 min read
App advertising

The cost of mobile ads can vary depending on many factors, including types of ads, industry, target audience, where the ad is displayed, and specific mobile ad platform etc.

Brands can use different pricing models to choose the best performing from for in mobile app advertising. Let’s take a look at the most common pricing models:

  • cost per mile (CPM),
  • cost per install (CPI),
  • cost per click (CPC),
  • and cost per action (CPA).

Learn more about the differences between CPC, CPM, CPA, and CPI

Оne of the primary metrics for digital advertising, and specifically for mobile app advertising, is the average CPM, which stands for Cost Per Mille.

CPM is one of the earliest and still the most common method of paying for mobile ads. It means the cost of 1,000 impressions for a particular ad.

In a pay-per-click (CPC) campaign, the advertiser only pays for each click on the ad. The idea here is that the brand only pays when someone actively interacts with the ad by clicking on it.

CPA takes CPC one step further. This pricing model is commonly used by advertisers and marketers to target ad campaigns further down the funnel (to make conversions). Likewise, some campaigns – especially for companies with an app-centric business model – operate on a CPI (cost per install) basis.

Let’s discover factors that have an impact on how much advertisers can pay for mobile ads:

  • The size and complexity of ad formats: The average CTR of all banner ads is around 0.06 percent. In contrast, the average CPM for in-app video ads (including full-screen video ads and videos with interactive end screens) is 300 percent higher.
  • Android or IOS. Historically, iOS users have been richer than Android users, making them a more profitable target audience for advertisers. Brands can expect to pay 30 percent more to reach iOS users over Android typically, but specific prices can vary by mobile ad network and exchange.
  • Device type: Brands may be willing to pay more (or less) to reach users with certain types of devices. First, advertisers may prefer smartphones over tablets and are willing to pay extra to keep their ads from appearing on tablets.
  • Geo: Location can affect how much an advertiser might be willing to pay to contact them. Country, region, city, and area can affect advertising rates. For example, some brands may see people with rich zip codes as more valuable.
  • Time of day: People are more likely to perform certain actions in apps at certain times of the day, so brands may be willing to adjust their preferred payment rates accordingly. For example, people are more likely to buy something online at 8:00 pm than, say, 6:00 am. Thus, some advertisers may want to spend more to get their advertisements in the email.

Average mobile app CPM rates in 2020 by SmartyAds SSP:

  1. The average U.S. rewarded videos’ CPMs is around $15 for iOS and $11 for Android
  2. The average CPM for banner all Android devices is $0,4 and $0.5 for iOS
  3. The average CPM for full-screen ads $ 9.50 for IOS and around 6$ for Android.

Mobile App Advertising ROI

  • 01

    In-App Ads

    Average ROI (%): 150%

    Cost Efficiency (Rating): 8/10

  • 02

    Mobile Video Ads

    Average ROI (%): 180%

    Cost Efficiency (Rating): 9/10

  • 03

    SMS Marketing

    Average ROI (%): 200%

    Cost Efficiency (Rating): 9/10

  • 04

    Mobile Games Ads

    Average ROI (%): 160%

    Cost Efficiency (Rating): 8/10

  • 05

    Location-Based Advertising

    Average ROI (%): 170%

    Cost Efficiency (Rating): 9/10

E-commerce Platform Advertising Rates

PlatformAd Type Average CPC (₹) Average CPM (₹) Audience Reach
Amazon Sponsored Products ₹5 - ₹10 ₹40 - ₹100 Very High
Flipkart Sponsored Products ₹5 - ₹12 ₹45 - ₹110 High
MyntraDisplay Ads ₹6 - ₹14 ₹50 - ₹120 High
SnapdealSponsored Products ₹4 - ₹9 ₹35 - ₹90 Medium