Mobile Advertising Business Models: Pros & Cons | AppsFlyer

Mobile Advertising Business Models: Pros & Cons [Cheat Sheet]

Cost per mille (CPM)

Pre-determined price for every 1,000 impressions (mille being the Latin term for one thousand)

Pros: 

Cons: 

Maximal brand awareness and reachNon-performance model
Lower costGreater chance of non-transparent networks sending low quality impressions

 

Cost per click (CPC)

Pre-determined price paid every time a user clicks on an ad

Pros:Cons:
Easier to analyze user engagement through ad creative A/B testingFat fingers phenomenon = risk paying for unintended clicks and damaging brand with negative user experiences
 Higher cost than CPI without resources to optimize click-to-conversion path, perform robust analysis, & protect against fraud

 

Cost per install (CPI)

Pre-determined price paid every time a user installs the application

Pros:Cons:
Performance modelRisk of non-transparent networks driving a high volume of low quality, or incentivized, traffic
Lower cost 
Low risk 

 

Cost per action (CPA)

Pre-determined price for every in-app action defined by advertiser (revenue- or engagement-related) 

Pros:Cons:
Pure performance model adopted by the savviest data-driven advertisersScale may be negatively impacted
 Higher cost, but also higher value, so ROI only grows over time with higher LTV of acquired users