As part of an ongoing series, Digiday looks at things that are often put out as fact in the industry that, on closer inspection, don’t hold up. Earlier we explained why time spent online doesn’t correlate to budget spent.
According to a WSJ article published yesterday, AOL is asking up to $35 CPMs for inventory in its Huffington Post iPhone app. It’s a nice idea, but as most publishers are aware, few advertisers would even consider buying mobile ads at that price. Tablet ads might get some consideration, but not in-app mobile. Mobile-ad buyers agreed: $35 CPMs might be rate card, but nobody’s paying that in mobile, where supply far outstrips demand.
“I have not come across pricing that high for mobile-ad inventory,” said Phuc Truong, U.S. managing director of Havas-owned mobile agency Mobext. “Of the big portals, AOL is among the laggards to effectively monetize their mobile inventory. We rarely hear from their sales team about mobile opportunities.”
Dirk Rients, management director of mobile platforms at Draftfcb, expressed similar sentiments. “I’d be very surprised if any marketer would be willing to make an investment at that rate. … It really depends on the ad-unit type, but I haven’t seen anything even close to $35 CPM,” he said.
Of course, the $35 figure is a rate-card price, serving as a starting point for negotiations rather than a fixed price. One publisher described rate card as serving the same role as manufacturers’ suggested retail price on cars, i.e., a price nobody really pays. An AOL spokesperson said mobile ads are charged at a range of prices across its properties and that $35 is not necessarily the standard. Even so, few publishers are asking for investment at that level when they know it’s a buyer’s market.
“We’ll probably see a similar situation with AOL and HuffPo as we did will Apple’s iAd. … Start high, realize nobody is willing to pay, and then they’ll loosen their terms and drop the price,” Rients suggested.
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