Undervaluing Mobile Advertising

I had a meeting with the CEO of a very successful digital event listings network. We were discussing mobile and for him it was an afterthought, a feature on his site. We went through the revenue model for a mobile company I am working with in the space and he thought that $20 cpm was way too high. I thought to myself, either he doesn't get it or he has been trained to think that "because it doesn't cost me much to serve the ad we should charge less". I worked in media planning for a while during a previous life and I didn't see any advertiser value logic to the pricing of inventory. Their decisions were based on "here is what the market is charging, this is what we need to make per year to hit our revenue objectives, we believe our media is worth more because of some unquantifiable value proposition and this is our total available inventory" Perhaps because I have been on the other side of the table I believe in identifying the response rate by industry that the media can provide for a standard package, tying that response rate to a conversion to purchase and average purchase value per customer and then creating pricing that will drive a reasonable ROI per advertiser, per industry. This will result in a range of prices across industries, but the pricing would be value based rather than one size fits all. This would reduce the advertiser churn rate, increase the average annual spend per advertiser and reduce internal cost of sales. The point to this tangent is that the price of advertising through any medium should not be based solely upon their respective operating costs. Advertising should be based upon the value, value being revenues, that can be provided to the advertiser. I can reach 1000 consumers within 5 blocks of a venue and send them a highly targeted message and offer to visit the venue while they are in the decision making process. If 1 customer shows up and redeems the offer the business makes a profit... Think this # is too high...It has been proven that intent and location-based advertising works at a rate 3 to 4 times that of web advertising. My concern is that mobile advertising will be priced at a minimum because it can be, when it should be priced based upon the return that it can provide to the advertiser.