Why do ad rates drop in July? (CPMs)
Ever wonder why publisher ad earnings tend to see a dip in July (or even the start of October)? This is primarily because advertisers end their quarterly budgets in the month prior. That means ad campaigns end and some of the marketplace competition that drives higher ad rates for publishers goes away … temporarily.
Ad rates typically drop at the end of each quarter. Ad rates then recover as advertisers begin launching new campaigns for the new quarter.
Below, I’ll highlight ad rate trends that we see seasonally. Additionally, I’ll show why some drops are more dramatic than others.
Why do ad earnings decline at the end of every quarter
I go over all of this info in the video below. I highlight how these trends work and emphasize what factors determine strong ad earning declines.
What causes dramatic drops in ad earnings?
If a quarter ends on weekend, this typically results in a more dramatic drop than normal.
This is because advertisers usually don’t get back in the office until the week begins. This means new campaigns are slow to restart.
Typically, this will result in a more dramatic drop and slower recovery time in the ad rates for publishers.
If a quarterly change happens on a holiday, this can have the same effect for the exact same reason.
This is why July is particularly dramatic sometimes.
If the quarter changes over in July on a weekend, there is also the American holiday of the 4th of July. This often means that these advertisers are slower than normal to restart campaigns.
How to recover from losses fast
There is nothing that can be done to expedite the market’s recovery if you’re a digital publisher.
However, you can avoid making dramatic changes that could potentially affect your ad rates long-term. Often, publishers will overact to these market shifts; causing them to create negative variables that are hard to account for in the grand scheme of things later on.
The best way to monitor your recovery vs. the market is through The Ad Revenue Index.
If your recovery is slower than the index, take a look to make sure it isn’t the seasonality of your traffic (monitor and diagnose your traffic).
It is also worth making sure that you are calculating EPMV (session earnings). It is the best metric for determining if you are earning more or less, per visitor.
This is an important distinction because it will allow you to learn if you are actually receiving higher total earnings per session or not ( the penultimate metric for higher ad rates).
Questions, thoughts? Leave them below and I’ll chime in.