Since the dawn of the Internet digital advertising has been one of the major engines that drove its growth. In the year 2008 digital advertising began its transformation from desktop to mobile, which lead to advertising in apps and than ultimately to the rise of the mobile app advertising industry. The general trend of the last several years has been that people spend most of their mobile minutes in apps and not in a web browser. Following this trend, mobile advertisers and publishers have been focusing on running ad campaigns inside mobile apps to find new users and maximize their revenue respectively.
One of the core metrics for digital advertising, and mobile app advertising specifically, is an average CPM, which stands for Cost-Per-Thousand. On one hand, it tells advertiser how much a thousand ad impressions in a specific mobile app costs and on the other – publisher knows how much revenue he can generate from each 1,000 impressions he serves.
Among all digital ad metrics – CPM, CPC, CPA, last one is the most valuable to mobile advertisers, it stands for Cost-Per-Action, because it measures a cost of a specific action that people take with a digital product. But yet for mobile publishers, CPM has been The metric, because while running campaigns based on this model, they are being paid for how many times ads were shown inside their apps and so they shouldn’t be concern about if people actually take any action as a result of seeing those ads.
A mobile ad rates various per industry, ad delivery channel, geo location, mobile OS and more. In this guide we want to bring up the industry statistics to highlight average mobile ad CPM rates and eCPM rates for various channels, industries and locations, as well as mobile advertising spendings. Each advertising platform is unique at what eCPM it’s capable to provide and so we’re going to explore several dominant platforms and for doing so will cover AdMob eCPM and Applovin eCPM rates.
Key Mobile Advertising Rates data points:
- 2017 global mobile advertising spending – $107 billion
- 2017 US mobile ad spendings – $83 billion
- 2017 China mobile media spendings – $31 billion
- 2016 mobile ad percentage of the total ad spendings – 16%
- In 2017 Google generated 32% of the total US mobile ad revenue
- In 2017 Facebook generated 25% of the total US mobile ad revenue
- Average CPC in 2016 – $.0.27
- The highest CPC by location is in Denmark – $0.51
- The lowest CPC by location is in Bulgaria – $0.03
- average iOS eCPM – $5
- average Android eCPM – $2
- Applovin eCPM for iOS – $10
- Applovin eCPM for Android – $2
- AdColony eCPM for iOS – $5
- AdColony eCPM for Android – $2
- highest Facebook ads regional eCPM – $1.8 (Sweden)
- Facebook mobile ads CPM in Q2, 2017 – $5.7
- average Banner ad format CPM – $1
- average Interstitial ad format CPM – $3.5
- average Video ad format CPM – $3
- average Native ad format CPM – $10
Having these app ads revenue data points in hand, let’s dive into what mobile advertising looks like and analyze data collected for the last several years and add future forecasts on top of that.
Table of Contents
Let’s begin with setting up the stage and covering mobile advertising spendings worldwide over a period of time.
Mobile Ad Revenue Breakdown
For the last five years global mobile advertising spendings have grown from $19 billion in 2013 to $133 billion in 2017. The fastest growth took place in 2013, 2014, when year-over-year mobile ad spendings grew more than 100%. This year it’s projected that collectively companies will spend $166 billion or roughly 25% up from the previous year.
Global Mobile Advertising Spending Forecast, 2013-2019
When we put desktop and mobile ad spending volume measured over time together, it becomes crystal clear that starting around 2015 desktop spendings are in decline and mobile advertising spendings experience exponential growth. From 2006 to 2015 companies were spending progressively more from $40 to about $100 billion. Mobile ad spendings got a major lift in 2012-2013 period with introduction bigger screen smartphone models and when tablet computer market began to mature.
Global internet ad spending desktop vs mobile in $ billions, 2006 – 2018
Data for how much money are spent on mobile advertising in a particular year reflects on size of this country economy and how healthy it is but the dynamic of year-over-year growth or decline bring up a picture of how fast mobile penetrates different branches of this country’s economy. From 2013 to 2017 mobile ad spendings in US grew from $19 billion to almost $50 billion and projected to reach $57 billion this year. China holds the second place on the countries chart that shows how much businesses spend on mobile ads. Given the data that brings up App Annie 2017 Retrospective recent white paper that reports China to be number one country in terms of mobile app revenue, it’s a matter of time when it surpass US in mobile ad spendings as well.
Global Mobile Advertising Spending Forecast, 2013-2018, by country
Putting things in perspective always helps to see a broader picture and appreciate dynamics for real. The Zenith Optimedia agency report from Q3, 2016 compares advertising spending from multiple ad formats and here is what we see. In 2016 TV ads presented 36% of the total ad spendings pie, in 2019 this percentage is projected to shrink to just 33%, while mobile advertising will almost double, from 15% to 27%.
Global Advertising Spending by Format, 2016 vs. 2019
Now let’s look into the dynamics of media ad spending in different media with respect to absolute values.
According to eMarketer data from March of 2016, the total spend in 2016 passed $192 billion and is projected to reach $234 billion by 2020. The overarching trend is that during the five year period, from 2015-2020, mobile ad spending is poised to more than double, from $32 billion in 2015 to $77 billion by 2020. To put this growth in perspective, it’s enough to mention two figures. Number one – in 2015 mobile ad spendings constituted roughly 50% of the total digital spending of $60 billion, by 2020 it’ll jump to almost 75% of the total digital media spending that is projected to reach $105 billion. Number two – the other types of media growth for the same period is substantially smaller. TV ad spending by 2020 is projected to reach $77 billion, only 10% growth from about $69 in 2015.
US Total Media Ad Spending, by media 2015-2020, $ billions
For the last 10 years mobile app industry has been under control of the Apple – Google duopoly, for mobile advertising there is another duopoly of Google and Facebook. In 2016 US digital tech giants and smaller companies generated about $47 billion, 31.5% of which belong to Google and 22.5% to Facebook. In 2017 Google gained about 1% and Facebook grew faster with over 2%, reaching 32.4% and 24.6% respectively. All other companies on the chart had, have and projected to have less than two digits in the future. According to the forecast, by 2019 US mobile advertising revenue will reach $82 billion, almost double of the 2016 number, with Google having almost 34% of the total and Facebook around 27%.
US Mobile Ad Revenue by company in , 2016-2019
Average CPC Rates
Along with CPM metric there is another equally important one that measures how much does a click on a mobile app ad cost – CPC, stands for cost-per-click. Just as CPM, this metric varies for different advertising platforms, let’s take a look at the data compiled by Kenshoo marketing technology company. The following graph is based the data pool that consists of over 25 billion impressions, over 250 million clicks, and over $100 million in total paid social spend, spanning 28 countries and 15 industry categories. Throughout 2015-2016 period CPC varied from roughly $0.35 in Q2, 2015 to $0.27 in Q2, 2016. During this time the peak value CPC reached was in Q4, 2015, a quarter that covers the Christmas season when all advertisers are doing their best to reach more of their target audience and hence CPC should go up.
Mobile app install ads CPC trends, 2015-2016
Next up is the graph that presents Kenshoo data for cost per click on different devices, it essentially allows us to stack mobile clicks pricing against a desktop. In 2015-2016 we see a slight increase of a cost-per-click for smartphones and desktop from $0.40 to $0.42 and $0.65 to $0.71 respectively, while CPC for tablet computer ads went down from $0.71 to $0.65.
Cost per click by device in dollars, 2015-2016
Facebook advertising platform is the biggest one on the planet and it provides a broad spectrum of advertising tools to reach target audience via its app on desktop and mobile, as well as on Instagram and via its Audience Network that serves thousands app developers with target ads that match their app users interests. As we look at the data compiled by AdEspresso Facebook ads management company in 2016 for all above mentioned types of Facebook ads, we see Instagram ads being the most expensive ones – $0.60…$0.72 per click and Mobile Newsfeed cost-per-click ranged around $0.18 per click.
Facebook cost-per-click in $, by placement
Facebook ads as a marketing tool are available in many countries around the globe. The number of users Facebook has in different countries is vastly different and on top of that these countries are in a different stage of their economy, it all adds up to a significantly different cost-per click for Facebook ads. Among 25 countries presented on the graph below, cost-per-click ranges from $0.51 per click in Denmark to $0.03 per click in Bulgaria and the average is roughly $0.2 per click.
Facebook average cost-per-click in dollars, by country
Android and iOS eCPM Rates
Let’s switch gears and talk about eCPM rates for major advertising networks. To clarify eCPM term, the difference between CPM and eCPM is that CPM (stands for cost-per-mile or a cost of 1,000 impressions) defines how much ad impressions are valued before an ad campaign takes place. On the other hand, eCPM is calculated by advertisers after ad campaign is finished and regardless of what buying model was used – CPM, CPC, CPA. Due to some over- or under delivery by the ad network or the publisher, an eCPM price may vary from a CPM rate.
So now the question is – what is the average CPM? To answer this question we’re going to review the aggregated data from 2015 to 2017, from the top four mobile advertising networks – Chartboost, AppLovin, AdMob, InMobi, Admob had been providing Android app publishers with the highest eCPM – up to $7.5 per 1,000 impressions on average.
Top mobile ad networks Android eCPM Rates, 2015-2017
On the iOS side of the mobile ad equation, Admob had been the leading force as well, providing similar eCPM. Also comparing these two graphs, we see that in fact with iOS all major ad networks provided higher eCPM, reaching $5 per 1,000 impressions on average against about $2 for Android mobile platform.
Top mobile ad networks iOS eCPM rates, 2015-2017
Now let’s analyze individual leading ad networks, starting with Applovin eCPM rates for Android versus iOS. Throughout the same 2015-2017 period, publishers had been generating about $10 per 1k impressions, with May – June 2015 period as an outlier of that general trend, when there was a spike of about $15 per 1k impressions.
iOS eCPM Rates in US for Applovin
For Android mobile platform Applovin experienced significant drop in eCPM during August 2015 – August 2016 period when an average eCPM was about $2. As of November 2016 eCPM got back on the same level it was back in April – July 2015 period – $5 per 1,000 views and above.
Android eCPM Rates in US for Applovin
Next up is AdColony, one of the largest mobile ad platforms in the world. During spring 2015 – winter 2017 period iOS publishers could generate consistently about $5 revenue per 1,000 impressions served. In a contrast with Applovin it was roughly a half of what mobile app publishers could generate with iOS apps on that platform.
iOS eCPM Rates in US for AdColony
On the other hand, the Android platform was much of a rollercoaster for publishers, with eCPM ranging from about $2 to up to $20 in the peak during April – May 2016 peak. On average eCPM fluctuated around $4-5 per 1,000 impressions. Just like with AppLovin, significant fluctuations of AdColony eCPM over time should be attributed to new smartphone models releases that triggered mobile users wish to download and try new apps on a brand new smartphone or a tablet, as well as seasonal changes. Both these factors lead to a size increase of mobile publishers app inventory.
Android eCPM Rates in US for AdColony
Facebook CPM Rates
Next up are CPM rates of the biggest player on mobile advertising market – Facebook. Facebook ads rates, just like with advertising in general, are tied to local economies conditions and the size of a local digital market. Among a number of European, Asian, Latin and North America countries the highest CPM rates are in Sweden – $1.8, Denmark – $1.7 and Taiwan – $1.5.
Facebook Ads CPM Rates, by country in 2015
Now let’s analyze CPM rates for Facebook Ads in US for various industries, specifically CPG (stands for Consumer Packaged Goods), E-commence, Gaming, Retail and Travel. An average CPM all these industries equal to $7, with Travel industry topping the rest, $8 per 1,000 views. The fact that E-commerce and Retail cost are almost equal reveals an overall trend – many retail companies are moving towards e-commerce and place ads on Facebook both ads for their physical stores and their online extensions. Given the fact Facebook dominates the advertising industry and mobile constitutes the bulk of ad spending, we can approximate this trend on mobile advertising as a whole.
US Facebook Ads CPM Rates, by industry in 2016
Facebook Ads platform provides a wide range of advertising tools – Instagram ads, video ads, mobile app install ads, carousel and dynamic product ads. According to Kenshoo app marketing technology company data, Instagram provides the highest CPM rate of $6.75 per 1k impressions, with video ads holding the second position with $6.29 and app install in particular allowed publishers to make $5.13 per 1,000 impressions.
Facebook CPM by ad format in Q2 2017
Mobile advertising market is mature and has been one of a major sources of digital publishers revenue, as well as instrumental for advertisers to reach their audiences. Mobile ad spendings have been substantially growing over a period of the last five years and will continue to grow as mobile continues to conquer more and more businesses worldwide.
Mobile ad eCPM rates vary by industry, mobile OS, geo location and specific mobile ad network. Between Android and iOS mobile platforms, the latter tends to generate more income for publishers.
Facebook and Google together control the major part of the mobile advertising market and this status quo won’t likely to change anytime soon.