Mobile app marketers are always looking for ways to optimize their advertising strategies and improve user acquisition. For this, one of the most widely used metrics in this process is CPM or "Cost Per Mille." While it may seem like a straightforward concept, understanding how it works and how to utilize it best can significantly impact the success of your mobile app marketing campaigns.
This blog will explore the CPM in detail—its definition, role, calculation, benefits, challenges, and how you can optimize it to achieve better marketing results. By the end, you’ll have actionable insights to help you make smarter campaign decisions.
What is CPM (Cost Per Mille)?
CPM stands for "cost per mille," with "mille" being the Latin word for "thousand." It refers to the cost an advertiser pays for every 1,000 impressions of their ad. This metric is commonly used in mobile gaming to drive brand awareness and expose new players to your game. Whether you're promoting a new mobile game or trying to attract more players to an existing one, CPM is a valuable tool for scaling your reach.
Unlike other metrics that focus on specific user actions (like clicks or installations), CPM is geared toward gaining visibility. The idea is to show your ad to as many users as possible, hoping that some will install the game or engage with the content.
CPM can be particularly valuable when your primary goal is to grow your user base quickly. Think of a game launch: you'll likely need to get your ad in front of a large audience, regardless of whether each viewer clicks or installs immediately. For such campaigns, CPM is often a go-to metric.
How does CPM function?
The calculation for CPM is straightforward. You divide the total cost of the advertising campaign by the number of impressions it generates (in thousands) and then multiply the result by 1,000. Here’s the formula:
Let’s say you spend $2,000 to run an ad campaign that generates 500,000 impressions. The calculation would look like this:
In this case, you’re paying $4 per 1,000 impressions. So, for every 1,000 times your ad is shown to a potential player, you pay $4.
This model is especially useful for campaigns that aim to create awareness around your game without the immediate need for user interaction or installs.
What is the Average CPM Rate?
CPM rates can vary widely depending on several factors, including the platform, geographic location, industry, and market trends. Rather than fixating on the average CPM, it’s more crucial to focus on the value of where your impressions are displayed.
For instance, consider social media platforms. Meta (which owns Facebook and Instagram) charges over $7 for every 1,000 impressions, while on X (formerly Twitter), the cost is significantly lower at around $1.20 per 1,000 impressions. TikTok and YouTube typically fall in between.
However, choosing the platform with the lowest CPM is not always the best strategy. If your target audience is active on Instagram, it may be worth spending more for exposure there, as the return on ad spend (ROAS) could be much higher compared to a platform like X, even if the CPM is lower.
Looking at trends over the past couple of years, the average CPM for social media advertising in Q4 2023 was around $6 per 1,000 impressions. This figure highlights the effect of seasonal demand, as costs tend to rise in the fourth quarter when advertisers compete for visibility before the holiday rush.
Now that we’ve covered how CPM works and the factors that affect its cost, let’s explore its benefits for mobile gaming marketers.
Benefits of Using CPM in Mobile Gaming Marketing
There are several reasons why CPM is popular among marketers, especially in mobile app marketing. Let’s explore the key benefits:
1. Broad Reach
Since CPM is focused on impressions, it’s an ideal model for campaigns that aim to reach a large number of potential users. This is essential for mobile gaming apps that want to raise awareness and attract a wide audience.
2. Clear Pricing
CPM offers transparency in pricing. With a fixed cost of 1,000 impressions, advertisers can easily calculate the budget required to reach a particular audience size.
3. Easy Optimization
CPM campaigns are easy to optimize because they focus on visibility. Once you understand how much you're paying per 1,000 impressions, you can adjust placements, creatives, and targeting strategies to achieve better results.
4. Scalability
CPM campaigns can be easily scaled. As your budget increases, you can target more users, gaining exposure to a larger audience without worrying about the complexities of tracking clicks or conversions.
However, it’s important to consider some challenges that come with CPM before diving in.
Challenges of CPM in Mobile Gaming Marketing
Despite its advantages, CPM has some challenges. It's important to understand these before launching a CPM-based campaign.
1. No Guarantee of Engagement
While CPM ensures that your ad is shown to a wide audience, it doesn’t guarantee that users will click or engage with your ad. Without strong targeting or compelling creatives, your ad might be shown to users who have little to no interest in your game.
2. Ad Fatigue
Repeatedly showing the same ad to the same users can lead to ad fatigue, where users start ignoring or avoiding the ad. This reduces its effectiveness and can hurt your brand’s reputation. Therefore, it’s essential to refresh creatives and use strategies like frequency capping to maintain a fresh, engaging experience for users.
To overcome these challenges, adopting the right strategies is crucial. Let’s look at some best practices that can help you optimize your CPM campaigns effectively.
Also Read: Mastering ROAS for Mobile Games and Apps: The Ultimate Guide
Best Practices for Optimizing CPM in Mobile App Marketing
To make the most of CPM, it’s essential to follow best practices that help you get the highest value from your ad spend.
1. Optimize Ad Placements
The type of ad and its placement can significantly influence your CPM in mobile gaming. Different ad formats come with varying CPM models:
Standard CPM: This traditional model charges advertisers for every 1,000 ad impressions, regardless of user interaction. It's commonly used for banner ads.
Viewable CPM (vCPM): In this model, advertisers pay for every 1,000 viewable impressions, meaning the ad must meet specific viewability criteria to count. This ensures that ads are actually seen by users, providing more value to advertisers.
Effective CPM (eCPM): This metric calculates the revenue generated per 1,000 impressions, considering all revenue streams. It's particularly useful for publishers to assess the performance of their ad inventory.
CPM rates vary across different ad formats in mobile gaming. Here's a breakdown:
Banner Ads: Small, static ads displayed on-screen; CPMs range from $0.50 to $2.
Interstitial Ads: Full-screen ads appear at natural breaks; CPMs range from $2 to $5.
Rewarded Video Ads: Users watch videos for in-game rewards; CPMs range from $10 to $30.
Playable Ads: Interactive demos of games; CPMs range from $10 to $30.
CPM Benchmarks by Category:
Strategy games have the highest CPM, averaging $21.58, followed by Adventure at $20.85 and Simulation at $19.22. Puzzle games charge $18.47, and Casual games are priced around $17.44. Card games have a CPM of $16.13, while RPGs are slightly lower at $14.73. Casino games cost $12.79, Action games $10.51, and Board games are the least expensive at $7.70.
In regions like the USA, Australia, and Japan, CPM rates are among the highest, with the USA averaging $19.31. These regions indicate strong competition for ad space, making them prime targets for advertisers.
Strategies to Optimize CPM
Align Ad Formats with User Behavior: Select ad formats that resonate with your audience; for example, rewarded video ads and playable ads often yield higher engagement in gaming apps, leading to better CPMs.
Strategic Ad Placement: Place ads where users are most likely to engage, such as during natural pauses in gameplay for interstitial ads.
By understanding and implementing these CPM benchmarks and strategies, you can enhance user acquisition efforts and revenue generation in mobile gaming
2. Balancing Increased CPM with Higher ROAS
While hyper-targeting may raise CPMs, it often results in acquiring users with higher engagement and monetization potential. These high-quality users are more likely to make in-app purchases or interact with ads, leading to increased revenue. Consequently, the higher initial CPM is offset by a superior ROAS, as the revenue generated from these users surpasses the additional advertising costs.
To optimize this strategy, you may consider leveraging lookalike audiences to expand reach without compromising user quality, implementing ROAS-focused bidding strategies to ensure ad spend aligns with revenue goals, and diversifying acquisition channels to discover high-quality users across various platforms. By focusing on these tactics, you can balance higher CPMs with improved ROAS, leading to more effective user acquisition campaigns.
3. Innovative Ad Formats and Mechanics
The quality of your ad creatives plays a vital role in the success of your CPM campaigns. To stand out and attract a broader audience, consider incorporating unique game mechanics into your advertisements.
For example, some 4X strategy games have adopted the "Gate Runner" mechanic - a feature where players navigate through gates that affect their in-game abilities or rewards to appeal to casual and hyper-casual gamers. This approach not only broadens the game's appeal but also allows acquisition at lower CPMs, as the trending mechanic resonates well with a wider audience.
4. Incorporate Playable Content
Playable ads have become a powerful tool for engaging potential players in mobile gaming. These interactive ads let users experience a snippet of the game before downloading, offering a hands-on feel of the gameplay. This approach captures attention and leads to higher conversion rates compared to traditional static or video ads. By allowing users to "try before they buy/download," playable ads attract more engaged and interested players, resulting in improved user acquisition and retention metrics.
5. Implement Frequency Capping
While exposure is important, overexposing the same user to the same ad can irritate. By implementing frequency capping, you can limit the number of times a single user sees your ad, which reduces ad fatigue. This ensures that the ad remains effective and fresh, boosting user interest over time.
6. Leverage Programmatic Advertising
Programmatic advertising automates the buying of ad space in mobile games, using data-driven algorithms to optimize ad placements. This approach ensures that your ads reach the most relevant users, improving engagement and making user acquisition more efficient.
Key Benefits:
Automated Ad Space Buying: Real-time bidding ensures that your ads appear in the right places at the right time, optimizing ad spend.
Precise Targeting: Programmatic platforms analyze user behavior and demographics to deliver ads to the most relevant audience, increasing engagement and conversion rates.
Real-Time Adjustments: Algorithms adjust bids and ad delivery based on user interactions, improving ad performance and maximizing the chances of user acquisition.
Cost Efficiency: Continuous optimization of campaigns based on performance metrics reduces waste and enhances ROI.
Popular platforms like AdMob, Unity Ads, AppLovin, and Chartboost specialize in mobile game advertising. These platforms enable seamless ad integration, tailor ads based on user preferences, and foster user acquisition and retention by targeting the right users effectively. Incorporating them into your strategy can streamline and enhance your user acquisition efforts.
7. A/B Testing
To find out what works best for your target audience, you should regularly conduct A/B testing on your creatives, placements, and targeting strategies. Testing different ad formats (such as banner ads vs. video ads) or targeting parameters (like location or device type) can help you fine-tune your approach and ensure that you're getting the most out of your CPM budget.
8. Allocate Budget to Retargeting
Retargeting users who have previously interacted with your game, such as those who installed the app but became inactive, can significantly boost conversions. You can craft personalized campaigns that resonate with their preferences by segmenting these users based on their in-game behavior and engagement levels.
For instance, offering incentives like exclusive in-game items or discounts can entice inactive players to return. Implementing deep linking in your ads ensures that users are directed to specific in-game locations, enhancing their experience and increasing the likelihood of re-engagement.
9. Optimize Seasonally
To enhance user engagement and retention in your mobile game, consider implementing LiveOps strategies, such as running seasonal events and limited-time offers. LiveOps, short for live operations, refers to any changes, updates, or improvements made to a game without releasing a new version. By integrating these time-sensitive events, you can create a dynamic gaming experience that encourages players to return regularly, thereby increasing engagement
10. Utilize Data and Analytics
Finally, always use data to guide your decision-making. Mobile gaming ads generate a wealth of data that can be used to track performance, identify trends, and make adjustments. Collaborate with a mobile measurement partner to accurately measure campaign success and identify opportunities for optimization.
As you progress through these practices, remember that optimizing CPM is an ongoing process. Continuous refinement and adjustment are key to sustaining long-term success.
Also Read: Unlocking Creative Insights: A Game-Changer in Mobile App Marketing
Conclusion
CPM is a powerful tool in the mobile gaming industry for reaching a broad audience and building awareness around your game. While it does come with some challenges, such as the lack of guaranteed engagement and the potential for ad fatigue, applying best practices can help optimize your CPM campaigns for maximum impact.
By targeting high-value audiences, investing in quality creatives, using video content, and adopting programmatic solutions, you can maximize your CPM and effectively scale your mobile game’s user acquisition efforts.
For those looking to take their campaigns to the next level, exploring tools like Segwise can provide AI-powered creative insights and alerts that help optimize campaigns and other aspects of your user acquisition strategy.
Start your 14-day free trial with Segwise today!
