• Siddharth Sehra

How Are In-App Advertising Rates Calculated?

Mobile apps have become mainstream, so the revenue generated from in-app advertising will be determined by many variables. With any advertising medium, its revenue potential fluctuates as per the niche, audience size and audience demographics. Huge audience size can generate revenue, and any specialty apps that are attracting smaller and valuable user segments, also have high potential.

When developing a mobile app, you must think about in-app advertising rates calculated in advance or how much it can cost to lead your users onto your app. There’re a few cost formats for mobile media rates that you have to know when calculating the costs to build users for your mobile app.

Suppose you are a newcomer in this field, you might be confused by the abbreviations that many marketing agencies have formed for the broad field of mobile media rates.

The Mobile In-App Advertising Rates Models

Advertising over other apps is one common way of driving more users on your app in an app store. Knowing the budget that advertisers need to invest in the specific campaign type generally depends on an approach towards the user.

CPA or cost per action is the most risk-free in-app pricing model for the advertisers. The reason is doesn’t matter how good and bad the publisher’s audience is, its price is pre-set on the conversion. No matter if a publisher requires 1,000, 10,000 or 100,000 impressions for delivering just a single conversion, as he/she has to pay just for one conversion delivered. While publisher could have sold his impressions for different rates

CPM or Cost Per Mille is another highly risky mobile pricing format for the advertiser, and, in turn, the high risk-free format for the publishers. Advertiser does not know how many impressions they need to buy to generate one conversion. Suppose they want 1,000 than 10,000 impressions to generate the conversion, it may result in 10/100 times of higher conversion costs. While publisher can sell their 1,000, 10,000 and 100,000 impressions for the same CPM, that is for $5 for every 1,000 impressions.

CPC or Cost Per Click campaigns, an app owner has to pay only when his ad is clicked. It is the most efficient and often used way of advertising for 2 important reasons:

It allows mobile advertisers to calculate rates with the high security then what they will get in return for the ad spend. The estimated revenue for million impressions is more predictable for the publishers.

It’s fair for both the parties: Publishers do not carry any risk of the users not connecting after clicking on an ad (unlike other formats like CPE, CPI, or CPA). Advertisers just pay when the customer engages with an ad

Choosing the Right Mobile Ad Model

When it comes to different ad formats, many new advertising trends are rising every year and advertisers have to be a little cautious and avoid jumping on this bandwagon and tailoring ad campaigns completely based on the most trending moment. So, the safest way of selecting the right ad formats for any mobile campaign is thinking about the market that you want to reach, and the level of interaction that you want to improve between the ads and audience served. However, the final goal should be completely focused on building and strengthening your digital brand awareness and starting a conversion.