I have to disagree with this. It's probably true that e-commerce checkout processes are less optimized on mobile than on desktop, but that doesn't have a huge bearing on ad rates.
The majority of all ad spending is for brand awareness campaigns, not direct response. That's why CPMs for TV spots are still higher than both desktop banners and mobile banners even though TV has no checkout process. The prices are driven by Coca-Cola's spending, not ShamWow's spending. Also, desktop banner CPMs have been going up lately because of the new agency trading desks like Cadreon, Vivaki, and Xaxis. They are helping brands finally buy more digital ads because it's a lot more complicated and fragmented than buying TV, radio, or print.
Also, mobile usage is exploding right now. It makes sense that prices would be low while supply is growing faster than demand. Over time, the usage will level off and the ad dollars will catch up. I think the CPMs then will be a much better judge of the effectiveness of mobile ads, and I think they will be driven by how well brands can engage with consumers through mobile devices.
> That's why CPMs for TV spots are still higher than both desktop banners and mobile banners even though TV has no checkout process.
TV advertising has high CPMs because the results are hard to measure and executives like seeing their ads on TV. It's old school. There's also very little supply compared to online--you may like seeing your ad run during Sunday Night Football but that only happens 16 times a year. Facebook has more eyeballs than that every day.
TV and other "old media" also commands big money because companies like Apple focus on it and still see massive successes. It works. Does Apple even do banner ads at all? I don't remember ever seeing one.
Apple has done banner ads in the past. I remember a particularly attention-grabbing campaign they did a few years ago on the NYTimes home page. It was a fairly creative piece.
Yea, I have only seen their banner advertising on large established media brands (probably kicked in as part of print or TV campaigns). Apple is old school with advertising, Steve was intimately involved in creating the advertisements and I'm sure in placing them.
Apple does do some AdWords advertising (I see an ad pointing to Apple.com when searching for iPhone), but I have not seen any Apple video ads on YouTube. Perhaps that's because they don't want to pay Google any more money than they have to.
I can't think of a single company that needs TV advertising to survive less than Apple does. They have a fanatic user base that will advertise Apple products for free.
On the comparison of TV and online prices: Transactional advertising (direct response) generally costs more than the brand-awareness equivalent, not less, so I definitely wouldn't call the fact that TV is brand awareness the reason it is so expensive. Part of it is supply and demand - people are willing to pay more for TV spots and compete for them, so prices go up, and the fact that there are far less commercials shown on TV than adverts shown online is the supply part. There's also the fact that they are completely different mediums. A more accurate comparison would be TV vs. online pre-roll advertising, although even then it's not completely like-for-like, and the online pre-roll market is young enough that it's too early to see where we will end up price wise.
Regarding brand awareness vs. transactional: worth noting that an awful lot of online banner adverts are paid for from brand awareness budgets rather then transactional. It's not as clear cut as saying that the fact they can be clicked means their purpose is direct response.
The majority of all ad spending is for brand awareness campaigns, not direct response. That's why CPMs for TV spots are still higher than both desktop banners and mobile banners even though TV has no checkout process. The prices are driven by Coca-Cola's spending, not ShamWow's spending. Also, desktop banner CPMs have been going up lately because of the new agency trading desks like Cadreon, Vivaki, and Xaxis. They are helping brands finally buy more digital ads because it's a lot more complicated and fragmented than buying TV, radio, or print.
Also, mobile usage is exploding right now. It makes sense that prices would be low while supply is growing faster than demand. Over time, the usage will level off and the ad dollars will catch up. I think the CPMs then will be a much better judge of the effectiveness of mobile ads, and I think they will be driven by how well brands can engage with consumers through mobile devices.