Last updated: January 2020
As the new quarter begins, you may have noticed a drop in your CPMs. Seasonality (looking at how you—and the ad industry as a whole—are affected by the time of the year) impacts advertiser spend and thus, CPMs. While some verticals are impacted more than others, it’s important to understand how seasonality affects CPMs as they play a key role in forecasting and predicting revenue, and benchmarking.
Trends are always changing
Measuring trends on a monthly or quarterly schedule can be a difficult task as they tend to change over time. In 2019, we saw an increase in CPMs mid-July that we hadn’t seen before as a result of Amazon Prime Day. If you look at major consumer events, even those change year over year based on various factors such as consumer interest, advertiser budgets, product availability, and industry changes.
Advertisers typically plan their spend based on monthly and quarterly targets. As a result, we generally see spend lower at the beginning of a month or quarter, and higher at the end of a month or quarter. Advertiser spend also increases significantly for major consumer events like Back to School, Black Friday, Christmas, and Super Bowl Sunday. For each of these events, publishers will see a corresponding increase in CPMs.
Looking at monthly and quarterly performance
Figure A: Monthly CPMs – This is aggregated publisher data from January 2019 to December 2019.
As Q1 begins, you may experience your lowest CPMs in January as both consumer spend and traffic decrease. With CPMs fluctuating month over month (Figure A), as we move into March, you may experience your highest CPMs of the quarter. Later in the year, advertisers tend to spend less in the summer months (July and August), but CPMs usually pick up again in September.
When you look at quarterly performance, rather than monthly, there is a pronounced drop in CPMs at the beginning of every quarter as advertiser budgets reset (Figure B). Overall, CPMs increase steadily through Q3, with a significant jump in Q4 around Black Friday. In this example, even with low campaign spend in July and August, Q3 out-performs Q2 as CPMs jump in September. It’s normal to see an increase in CPMs in the weeks leading up to a new quarter. This is a result of advertisers trying to complete their quarterly campaigns by buying the rest of the inventory needed.
Figure B: CPM drops – Aggregated publisher data shows the CPM trends for a three-month period.
Looking at quarterly performance (Figure C), we see that, overall, CPMs increase steadily through Q3, with a significant jump in Q4. As previously mentioned, even with low campaign spend in July and August, Q3 outperforms Q2 as CPMs jump in September.
Figure C: Quarterly CPMs – Aggregated publisher data from 2019.
Seasonality with Sortable
In 2020, we foresee ad tech trends such as privacy regulations, changes to cookies, and changes to ad serving technology. We understand that publishers can experience pain points with seasonality, especially when CPMs do not increase as much or as fast as expected. At Sortable, we help publishers maximize their revenue as these industry changes occur. For example, before the CCPA came into effect, we provided our publishers with recommended steps and continue to provide support from our Customer Success team.
At Sortable, we optimize your ad stack performance with a combination of reporting and analytics, and diverse demand. We optimize our publishers’ ad revenue with techniques like lazy loading, managed refresh, ad layout, and A/B testing suggestions.
Our Customer Success team monitors site performance and compares performance to network-wide trends to better understand and advise on site changes. We are always looking for ways publishers can improve their site monetization to ensure they are maximizing revenue to reduce the impact of any significant seasonal fluctuations.
Your experience throughout the year may vary—not all verticals are equally impacted by seasonality. If your vertical is one that is more sensitive to seasonal fluctuations, use the trend information we’ve discussed to help forecast revenue on a quarter-by-quarter or month-by-month basis. It’s also important to note that most publishers experience seasonality, so it’s important for you to be aware of how seasonality impacts your site monetization.
Interested in learning more about seasonality? Contact email@example.com to find how it affects your site. If you aren’t a Sortable customer but want to learn more about Sortable’s solutions, request a demo today.