The new year is here, and with it, one of the most frightening periods for publishers. Why is this? After the overactive months of November and December, there is a global drop in eCPMs, meaning decreased advertising revenue and poor overall advertising performance. This yearly phenomenon is common to all publishers, and it keeps getting lower every year. Unfortunately, what goes up must come down...
However, the good news is that by understanding the reasons behind these seasonal dips and taking a proactive approach (such as taking advantage of lazy loading ads), publishers can combat these slumps and protect their revenue. In this article, we’ll explore why advertising revenue drops during certain months and how you can optimize your strategy to help weather these fluctuations.…
Why Does This Seasonal eCPM Drop Happen?
Every year, the same thing happens. The advertising statistics for January, July and August raise hackles. Here are the main explanations:
Post-Holiday and Seasonal Slumps
After the fourth quarter, users’ purchase intentions decrease and e-commerce sites record less visits. This in turn affects the advertising industry, as most advertisers significantly reduce their participation in auctions.
Similarly, in the summer months (July and August), many consumers take vacations, which leads to a drop in web traffic. These summer months also align with the end of the fiscal quarter, when advertisers revise their budgets, further contributing to reduced demand.
Anticipating less engagement and purchase intention, advertisers pull back on their ad spending during these times, leaving publishers to deal with lower eCPMs and lower ad fill rates.
Advertising Budget Cycles
For many advertisers, January represents the beginning of a new fiscal year. This is a time when they reassess their advertising budgets and adjust their strategies. As a result, campaigns may be delayed or put on hold while they plan their campaigns for the upcoming months. This delay in spending means that demand for advertising inventories decreases at the start of the year, contributing to the typical January ad revenue slump.
Economic and Geopolitical Factors
- In addition to seasonal behaviors, global events that happen in the year have an impact on eCPMs. These include:
- Growing cost of living.
- Geopolitical instability in several parts of the globe (Ukraine, Gaza, Syria)
- Presidential elections in the USA.
- An increase in consentless and cookieless inventories.
How To Minimize This Drop in eCPMs?
To compensate for this decline, there are several techniques you can use:
Adopt Dynamic Floor Pricing
Dynamic floor pricing, powered by AI technology, analyzes multiple factors to determine optimal floor prices in real-time, ensuring you capture maximum value from every impression regardless of season.
How does Dynamic Floor Pricing Help?
- During peak demand periods (like Q4), dynamic floor pricing raises floor prices to ensure that publishers are capturing the maximum value from advertisers willing to bid higher for premium ad space.
- Conversely, during lower-demand periods (such as January or summer months), the system adjusts the floor prices downward to help maintain healthy fill rates and avoid unsold ad space.
Rather than manual adjustments, which can be time-consuming and imprecise, dynamic floor pricing technology provides continuous optimization while maintaining transparency with SSPs through pre-auction price communication. This automated approach represents a powerful tool to help preserve eCPMs and keep advertising revenue steady throughout the year.
To go further: discover how we can dynamically optimize your ad yield.
Optimize your Advertising Inventories
Simply having a high volume of ad space isn’t enough to guarantee high revenue — how that advertising inventory is managed, valued, and positioned plays a significant role in overall earnings.
Here are some ways you can optimize your ad inventory:
- Premium Ad Formats: Offering high-value ad formats like sticky top or sticky bottom placements and interstitials can significantly increase your eCPMs.
- Lazy Loading: Lazy loading refers to the practice of loading ads only when they are about to be viewed by the user. This reduces page load times, enhancing the overall user experience and ensuring that ads are shown only to engaged users, which boosts eCPMs and overall advertising revenue.
- Ad Placement Optimization: Automatic insertion technology identifies high-performing locations throughout your content. This strategy particularly emphasizes in-read placements where user engagement is highest, leading to better viewability rates and increased eCPMs.
Build Revenue Reserves
June, October, November and December are the months when advertisers concentrate their ad expenses (increased traffic before the summer vacations, Black Friday, Thanksgiving in the United States and Christmas). This is why advertising revenue is usually higher in the 2ᵉ and 4ᵉ quarters as traffic and user engagement increases.
By maximizing revenue during the busy periods and compensating for the lower eCPMs in slower months, you can create a more balanced financial model. Additionally, as direct sales decline, it can be advantageous to sell more advertising inventory via programmatic channels.
Conclusion
Ad revenue fluctuations are a reality for publishers, especially during months like January, July, and August. However, by involving dynamic floor pricing, optimizing advertising inventories, utilizing lazy loading ads, and taking advantage of peak seasons, publishers can minimize the effects of these seasonal drops, and protect their advertising revenue.
At Opti Digital, we constantly follow up with the advertising performance of our publishers via our dashboard, and we systematically check that our setup remains optimal. Our dynamic price floor optimization, automatic content insertion, and intelligent ad refresh technologies are able to compensate for seasonal revenue drops. Please get in touch with us if you would like to know more!
Update: This article was originally published on July 13, 2022 and has been updated on January 2025 to reflect current events.
