For now, advertising rates are “terrible”, with CPMs, or cost per thousand views, running at 35-40 cents, says Matt Murphy, who runs the mobile start-up fund at venture capital firm Kleiner Perkins. That compares with rates that are as much as 20 times higher for premium web sites. With advertising the lifeblood of much of the PC-based web, that has left a yawning chasm for many companies to cross before they can cash in on the latest internet boom.
Thanks in part to lower advertising rates on mobile, the average amount of money Google makes each time a user clicks on an advert has fallen in each of the last three quarters, with the decline accelerating to 16 per cent in the latest quarter. Facebook, meanwhile, revealed that the 16 per cent growth in its daily user numbers in the US and Europe in the latest quarter was entirely due to mobile, where it has just started experimenting with advertising. As a result, in the same quarter that the company made its debut on Wall Street, the number of adverts it carried in the US actually fell.
