For publishers, ad revenues fluctuate through the year. This is primarily because of seasonal trends in digital advertising. While fluctuating ad RPMs can be frustrating and gratifying, because one moment they drop and the next moment they rise, they’re all part of a learning experience. They are based on a number of factors like advertiser budgets, seasonality, and consumer trends. As a publisher, your aim must be to maximize revenue irrespective of the season or its trends.
While it is granted that seasonality trends impact publishers year-round irrespective of industry, keeping your revenue high is possible if you pay attention to certain factors and optimize your website. Seasonality has quite a sizable impact on revenue. Some months, your revenue might increase or decrease noticeably. As a publisher, you may not be in a position to control the onset of seasonality trends, but you can understand them and take steps to safeguard your interests.
What Causes Seasonal Fluctuations in the AdTech Industry?
Google says that seasonality is any predictable fluctuation or pattern occurring during certain weeks, every year. Some publishers may experience higher CPMs during the holiday season. This might be during Christmas for countries like the US and the UK, or Diwali, in India. Holidays are a cultural aspect that drives seasonality. Apart from this, publishers might also experience higher CPMs due to commercial aspects like the end of the season and Black Friday sales. Nowadays, advertisers are lavishing large amounts of money on their campaigns, while the number of users online on e-commerce and social media websites is burgeoning. Both these factors contribute towards publishers earning a higher revenue than usual. Last year 2020 saw a significant rise in the number of online consumers, primarily due to Covid-19. eMarketer estimates that US consumers spent around $190.47 billion dollars on holiday eCommerce purchases, a whole $50 billion more than 2019 figures.
Publishers benefit quite a lot from ad tech trends, serving an increased amount of ads to an ever-widening audience. The converse is also true. Traffic may trickle down during months like January and July. This might primarily be due to the drop in ad spending, as advertisers get back to the drawing board for planning. User behavior changes too, as people get back to normal routines. Seasonal fluctuations might also occur due to ad-hoc reasons, like a World Cup, Olympic games, or a presidential election. Such seasonal patterns could affect publishers. There’s no escaping them. However, some strategic planning might mitigate the damage.
Quarter Wise Breakdown
Most organizations divide their year into 4 quarters, namely
Q1, from January to March
Q2, from April to June.
Q3, from July to September.
Q4, from October to December.
The following points can shed light on what these quarters can bring, so publisher trends can be leveraged accordingly.
Q1 – Most publishers might know what the January Slump is. During the first quarter, as advertisers primarily focus on devising new strategies, they spend less money on campaigns. Moreover, online purchasing trends change as well, because people are less keen after Thanksgiving, Christmas, and New Year, to splurge. It isn’t a stretch to say that this is the worst quarter for publishers, in terms of revenue. Direct sales drop leads to more ad inventory being sold through programmatic channels, which might compensate for a drop in eCPMs. The middle of the quarter might see things return to normal.
Q2 – This quarter is relatively better for publishers, in terms of revenue generation. After drawing up their plans it’s time to spend those marketing dollars, putting money into different campaigns, focusing on experiments too – all this leading to higher revenue for publishers. Seasonality trends might change however, In Q2 of 2020, global media ad spending fell by around 46%, as compared to the same period in 2019, as businesses suffered because of the pandemic. Q2 is different because many advertisers or ad agencies finish their financial year, and try to spend all their budgets, ensuring nothing is left. For publishers, it’s a great quarter in terms of ad RPMs, as we move towards the end of June.
Q3 – There is a slump here as well, though not as bad as the one in January. One factor is a decrease in traffic, another is advertisers recalibrating their budgets. Traffic change depends on publisher niches, but when advertisers revise their budgets, everyone is affected. Summer is a quiet season, as people spend more time outdoors, less time online. Advertisers adjust their budgets, devising new strategies. Publishers might see a considerable dip in July, after which CPMs might increase.
Q4 – This is probably the best quarter for all publishers, as the end of the year sees a spike in online users, thanks to the number of holidays during this time. Brands splash money on ad campaigns, and publishers leverage this to earn higher revenues. For brands, being seen is imperative and competition is higher than ever. Holidays like Thanksgiving Day and Diwali begin in November. There’s also Black Friday and Cyber Monday. CPMs remain high all the way through the winter months in the run-up through Christmas and the New Year.
How Do You Optimise Revenue In The Face Of Seasonality Trends?
Q1 – Since earnings in this quarter are quite low, there are certain steps that you can take to ensure your revenue doesn’t drop much. Optimize your ad inventory, and try to experiment with various ad units, placements, and formats. Don’t be afraid to try out innovative ad sizes and layouts, and add them to your inventory. Ensure your content is top-notch, even if your site traffic isn’t much. Good content gives users an incentive to stay on your site, ensuring that your site ranks better in the coming months.
Good quality content aside, website health and keyword optimization should be your goal. Consult ad operational professionals, who can help you monitor your website. Private marketplace deals instead of programmatic auctions might give you results, as you have more control and increase your inventory value. Reducing floor price post Q4 might aid in bagging more deals, increasing the fill rates on your site. February is better for revenue generation, as you can take advantage of events like the Super Bowl, Valentine’s Day, and the President’s Day Sale.
Q2 – Performance in this quarter might be better than the first. If you were able to sail through the first quarter, you might have noticed a small increase in traffic and user engagement. Try marginally increasing your inventory’s floor price, to bag revenue. If the ad formats you used in the previous quarter are working, then great. However, if ad viewability hasn’t increased, consider a change. In the second quarter, occasions like Mother’s Day, Father’s Day, and Memorial Day might help. Don’t make major website changes on holidays to avoid technical glitches.
Q3 – Performance this quarter may not be as bad as the first, but publishers might need to implement certain changes to make sure they earn from their sites. During the start of the quarter, you could reduce the floor price a little, then increase it again in the quarter’s middle. Always re-adjust to see what works best. Q3 should also see the groundwork for Q4. Optimize your inventory, by experimenting with different ad placements, formats and units. By the end of Q3, you should figure out what works best. Try PMP deals if you think your inventory isn’t going anywhere using conventional methods. Look out for the 4th of July and Labor Day during this period.
Q4 – This is the most exciting time for publishers. Make the most of opportunities. Ensure you are aware of all the holidays and events during this quarter, even if they aren’t in your country. Your users may belong to a place where that event is important, so optimize your inventory. As the quarter commences, you should test if all website aspects are working properly. That means an effective traffic strategy, low page latency, keyword research, and website performance on different devices. Your ad viewability should be high. As more people browse and purchase, optimize for ad viewability for better revenue. Increase floor prices for higher returns, and take advantage of dynamic allocation for maximizing revenue. Tools like Google Analytics can help track user engagement and site performance.
In conclusion, seasonal patterns are inevitable, and if revenue declines in one quarter, it may increase in the next one. Publishers must be aware of what tactics to use so as to make the most of each phase. Prepare for each quarter to ensure you don’t fall prey to seasonality trends. Read our blog on ROAS to understand how to maximize your returns for each dollar spent on advertising.