What is a Good Mobile Advertising Business Model?

When it comes to choosing a good mobile advertising business model, your money is on the line. Making the wrong choices with marketing could put your business behind in terms of revenue and it could make staying afloat very difficult. However, if you manage to make the right choices then you’ll be able to turn your marketing efforts into a stronger revenue stream. As you can imagine, a good mobile marketing campaign could mean life or death for some businesses.

We’ll be discussing the potential of different mobile advertising business models below and sharing our opinion on what works best in different situations.
DSP vs ATD

Optimal Business Model for Brand Marketing, Increasing Reach

The mobile advertising business model that will be best for your own business depends on exactly what you’re trying to get out of your marketing campaign. You may end up running multiple mobile marketing campaigns over the next few years but before you can run a single campaign you must understand your goals for that campaign.

If your main goal is to focus on improving your branding as a business, reaching more users or to get more people to know who you are, either locally, nationally or internationally, then you will want to look at an advertising model that focuses on increasing reach.

Typically, the best option for this is CPM – with a CPM (cost-per-mille) based model, you are paying a set price based on every 1,000 users that your advertisement hits. This model has a range of pros and cons, but the pros are useful for this particular type of campaign.
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Pros of CPM

  • Great for increasing reach
  • Cheapest option for reaching the most users

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[one_half_last]Cons of CPM

  • Doesn’t directly lead to sales, actions or installs
  • Impressions could be very low quality

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The Optimal Mobile Advertising Business Model for Ad Installs

Sometimes reaching more people can be good, especially for branding, but CPM based campaigns have very poor performance when it comes to actually bringing in more revenue. If you’re looking for the rawest performance for your business then you may consider a mobile advertising business model that focuses on bringing in ad installs.

This kind of advertising model is called CPI and it is as simple as it sounds – cost per install. You will be paying a set price every time a user installs your application. The cost per install is of course going to be higher than the typical CPM rate in most cases because one install can hold a lot more value in it.

Ad install campaigns can be good for a number of reasons, but they’re not always the perfect option either.

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Pros of CPI

  • Great if you have targeted CPI (leads to stronger active user base)
  • Quick way to boost installs and jump up the app charts (Brings in more organic installs)

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[one_half_last]Cons of CPI

  • Can be a very expensive model
  • Some CPI networks have very low value users

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Best Mobile Advertising Business Model for Insights, Better Analytics

If you’re simply looking at getting the best understanding about your mobile marketing campaign then you’ll want to look at cost per action, or CPA. Whilst CPC (cost per click) can be good for improved analytics and accurate insights, CPC suffers from an issue that isn’t so great for performance and it affects accuracy too.

It’s too easy for a user to accidentally click on an advertisement from their mobile device and as a result you may end up with a lot of users who click on ads who actually have no interest in it. This will affect the amount your paying and messes up your analytics. As a result, we’d suggest CPA instead.

With CPA you can get users to complete a very particular action, either within your app or leading up to the install of your app. This is great because you can ensure that you’re getting the most out of your marketing budget. This is great for performance based marketing but it’s also great because a lot of big data or data driven platforms use this as their primary marketing model.

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Pros of CPA

  • Mostly ran by data-driven platforms with great analytics available
  • Great performance based marketing

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[one_half_last]Cons of Ad install campaigns

  • Higher cost than models like CPM or CPC
  • ROI is often based on user life time value

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Hopefully after you’ve read through this article you will have a good understanding of what mobile advertising model would be best for your next mobile marketing campaign. Each model featured in this article has their separate pros and cons so neither model should be immediately disregarded.

2015-12-04T17:32:45+00:00 December 4th, 2015|