January is a challenging time for publishers. After a booming Q4, January rolls around and there is a sudden drop in ad revenue and CPM.
As a publisher, this abrupt decline can be shocking and nerve-wracking, and understandably so. But above all, it’s important to realize that this is perfectly normal. Ad revenue is consistently lower in January specifically and in Q1 in general.
So, take a deep breath, reassure yourself that it’s going to be okay, and let’s walk through why this happens and what you can do about it.
Why Ad Revenue Drops in January
Your RPM and ad revenue are directly connected to how much advertisers are willing to spend. And in Q4, advertisers are willing to spend A LOT.
This is primarily due to the holiday season, when consumers shop at a far greater frequency than any other time of the year. Advertisers capitalize on the holiday shopping fervor by spending large sums of money promoting their products.
Advertisers also feel the end-of-the-year pressure and take advantage of Q4 to hit their annual goals.
But when January rolls around, consumers are recovering from the holiday spending and are less likely to make purchases. As a result, advertisers pull back their ad spending and instead use this time to analyze the previous year’s performance and strategize for the upcoming year.
What Does This Mean for Your Ad Inventory?
Drop in CPMs
This pullback on the side of the consumer and advertiser results in lower CPMs. And when advertisers are paying less, your ad revenue decreases as well.
Drop in Fill Rates
During the holiday season, publishers generally raise their floor prices in order to take full advantage of the holiday shopping.
If you forget to readjust your floor prices in January, you will see a large decline in fill rates because there is less overall demand.
Drop in Traffic
Some publishers also experience a drop in traffic in Januaryץ This is because there are less users online looking to purchase holiday gifts or researching various holiday season activities.
Lower traffic translates to lower ad impressions, which results in lower ad revenue.
What Can You Do?
Source: How I Met Your Mother
Do you remember that scene from How I Met Your Mother when Marshall shaves his head before his wedding in a dire attempt to fix his bad haircut?
Please, don’t be Marshall!
One of the most common mistakes that we see during this time of year is that publishers panic and make drastic changes that harm their ad revenue down the line.
Yes, seeing that drop in ad revenue is scary, but it will pass. The January drop is a difficult time for the ad industry, but it’s important to remain calm and not do anything drastic that you’ll regret later.
Lower Floor Prices
Floor price, the minimum cost at which a publisher is willing to sell its ad inventory, can be lowered in order to increase fill rates.
As noted above, many publishers raise their floor prices in Q4 due to the increased advertiser spending. But in January, when advertisers are spending much less on ads, high floor prices could mean lower fill rates because advertisers can’t match your floor prices.
Improve Your Website Content, SEO, and UX
January is a great time to focus on improving your site. This includes creating new content and improving SEO and UX.
Keeping your users engaged and creating new content that attracts new users is a sure way to ensure that your ad revenue will thrive as the year progresses.
Interstitial ads, full-screen ads that appear between two pieces of content, can be a great way to boost your struggling ad revenue.
Interstitial ads generate significantly higher eCPMs than traditional banner ads, and at a time when traditional ads are yielding lower eCPMs, interstitial ads could help your overall ad revenue.
If you don’t yet have video ads on your website, now is a great time to consider adding them.
Like interstitial ads, video ads generate significantly higher eCPMs than traditional banner ads. Advertisers are willing to pay more for video ads than traditional ads, making them a great way to boost your ad revenue.
Try Different Ad Serving Strategies Like Lazy Loading and Ad Refresh
The ad tech world has developed a great deal in recent years and there are numerous strategies that can help boost your ad revenue.
Two examples of this are lazy loaded ads and viewable refresh ads.
Lazy loaded ads are only served when they come into a user’s viewport, which reduces page load times and optimizes UX. Viewable refresh ads are ads in a user’s viewport that automatically refresh without reloading the page, which increases the number of ad impressions.
Seek Professional Help
Without a deep technical background in ad ops, implementing the above solutions could be tricky.
In addition, every website is unique, which means that every website requires its own unique solution.
That’s where professional help comes in. A professional monetization company like Adnimation can provide you with the best possible solution for your website and help you get over the January hump in one piece.
If you want to learn more, please feel free to contact our monetization experts for a free consultation.
If you remember only one thing from this article, let it be: don’t be Marshall!
The January drop is rough, but it is a known aspect of the ad industry.
Making large scale changes in attempt bypass the January drop can cause irreparable damage to your ad revenue.
Do your best to stay calm, improve your website, and look into various options that can help improve your ad revenue in January and throughout the year.