There is no question that mobile advertising should be a part of any modern marketing effort. With so many smartphones in use, it is important to be reaching your audience right in the palms of their hands. In fact, by 2018 some experts estimate that there will be 1.4 mobile devices for every person on the planet.
This same growth in reach of mobile also means that it is more important than ever to optimize your mobile advertising. Fortunately there are a number of techniques that you can employ in order to ensure that you are getting the most out of mobile advertising without spending too much.
First and foremost, it is important to understand that mobile is getting increasingly more expensive. The price per ad unit is continuing to go up as more advertisers enter the space and the average click through rate is going down. This means that even with the most optimized mobile strategy, the necessary spend amount is likely to be higher than in previous years.
With mobile becoming more expensive, it may be tempting to look for less expensive ad units. However, this frequently does more harm than good. Networks with cheaper ad units typically achieve worse placement. For example, dropping Facebook in pursuit of less expensive space means giving up a major channel.
What typically ultimately happens with this approach is that ads become far less impactful and the actual cost per conversion increases. A good strategy whenever evaluating a network is to run a limited test campaign that can help to hone in what the cost per conversion will be.
Another important thing to keep in mind while working on your CPM campaign is the average lifetime value of each customer. CLV is the aggregate amount of revenue you generate from customers over the entire span of their relationship with your business. This can be calculated on average by taking your total revenues and dividing by your total number of customers. For more detailed analysis, consider breaking customers up into groups and finding the average CLV of your enterprise customers for example.
Once you have calculated this, you have a solid number to guide how much you should be spending on customer acquisition. So, if you find that each customer generally results in $100 worth of revenues, you now have a number to contain customer acquisition within. Keep in mind that you need to calculate in other expenses as well such as cost of goods sold and any fixed costs.
In general the best way to hone in a CPM campaign is to experiment with different possibilities and new technologies and to carefully test them. Rather than just using the strategy that you always have, try creating a few A/B tests. These will help to illuminate what ad-spend, targeting parameters, and technologies work best for you. Remember that your goal should be to reach the right audience, at the right time, with the right message. So try some varieties of all three of those objectives in order to find a working strategy. Combining experimentation with a focus on impact, and calculations such as CLV, you will be able to find the right approach to mobile advertising for you needs.