Seasonality and the Rise of the CPMs

Liz Zwiers Seasonal Trends

Nowadays, we have to work harder to find hope when it seems like there are so many things to worry about. We find ourselves gravitating towards things that bring us comfort, like rewatching beloved movies and TV shows, spending time with our families, and eating ALL THE THINGS. Lately, it’s been difficult to discern what is real and what is fake. Today, though, we’re looking at the cold, hard data and finding plenty of hope there. 

The way we’d normally track Ad Ops industry trends is based largely on seasonality — review patterns from previous years and use that information to predict what to expect for the future. COVID-19 blew that particular method of analysis out of the water. We couldn’t compare our then-current CPMs to any other timeframe because this is the first time in recent memory our industry has experienced such a far-reaching, worldwide, financially impactful event. While we were all struggling to find ways to work within our new reality, people started to adapt. Companies started seriously exploring and implementing systems for remote work. Many businesses have shifted their brick and mortar stores to include virtual ones, creating a safe space for people to shop in spite of the pandemic. And with these shifts (among many others), we find that even in the midst of a second wave, we’re starting to see seasonality trends re-emerge. 

What do we see in the CPM data?

Comparison CPM data from 2019 to 2020 Sortable

As you can see in the graph above (showing the month-over-month CPM trend), CPMs took a real hit at the beginning of the year. Q2 was extremely weak as businesses strategized for how to handle business in the pandemic. It seemed as if marketing dollars were redirected since many of the active campaigns didn’t work in the new environment. A large increase showed up at the end of Q2 as budgets spent through and businesses were more ready to handle remote work. Q3 was fairly stable, but we once again saw spend being heavily backloaded, with September jumping up closer to 2019 levels than we have been all year. Overall, at the moment, seasonality actually does look quite stable. Q2 was very heavily impacted, but we can see the general pattern for Q3 normalizing to what we would have expected. Even more promising is what we saw in October. 

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There is almost always a huge drop at the start of Q4. Virtually every year, there are very gradual increases in spend throughout October, and then a week or two before Black Friday, we see a large spike. With COVID impacting the beginning of the year, instead of a drop in October, we saw spend rise.  

When we look specifically at October, comparing it to last year’s spend, not only is it back on track in terms of seasonality, it’s actually *above* the levels we saw last year, and at the highest levels we’ve seen this year!

Oct CPM data Sortable

What can we expect for the rest of the year?

If October is any indication, Q4 looks like it’s going to be a humdinger of a quarter. Q4 is chock full of high CPM events. Very solid Amazon Prime Days in October may have been responsible for the earlier climb this October (October 13–14), and we have Black Friday and Christmas coming up fast. Now that the world has shifted to virtual, many people may be shopping entirely online this year. It’s important to note that although internet use is way up, we may still see CPMs decrease as ad slots on the internet are subject to standard supply and demand mechanics. At the same time, annual budgets are aimed to take advantage of big spend days, and this year, it may be more pronounced than usual. We’ll be watching CPMs closely as it’s a useful guide in determining overall health of ad performance. 

This year is unique in that a lot of marketing spend has been restricted. Hopefully, we’ll see that extra budget come out in Q4 as businesses try to cash in on the holidays. Also, from a consumer perspective, spend may increase significantly this year as a way to deal with the stress we’re all feeling. Holidays give us an excuse to go all out and with many outlets like plane trips, vacations, and sporting events off the table, consumers have far fewer places to spend their money than they typically would at this time of year. Marketing professionals should be looking to ramp up their efforts to take advantage of this, which should be a massive boon for publishers, and a very successful Q4.

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What does it all mean?

This year has been a roller-coaster. Financially, emotionally, socially — we’re all exhausted. So much of our joy, as humans, is found in the anticipation of future outcomes. For many, the holidays approaching is the bright light that we’ve been waiting for in this weird, awful time. This quarter, with unspent ad budgets potentially coming into play, we may see seasonality have a magnified effect on publisher’s profits. 

The fact that we see some clear signs of recovery coming out of Q3 and the beginning of Q4 is very, very positive. We’re optimistic that the rest of Q4 will bring many more reasons to be thankful — for advertisers and publishers alike. If you’d like to be more proactive in terms of increasing revenue for your site(s) for the upcoming season, consider using a few of our tried-and-true wins like anchors, stickies, managed refresh, outstream video, and Sortable’s hosted ads.txt solution.

At Sortable, we continuously monitor site performance and ensure that you’re aware of seasonal trends. If you’re interested in learning more, get in contact with your account manager or email you aren’t a Sortable customer but want to learn how Sortable’s solution stacks up against the competition, can earn you more, and gives you access to the best analytics platform in the industry, request a demo today.