THE JULY AND JANUARY REVENUE BLUES: WHY THEY HAPPEN (AND WHY NOT TO WORRY)
It’s the end of June! The summer sun is shining, the days are long, and if you are a Mediavine blogger you are likely very much enjoying your earnings this month.
If you are a seasoned blogger and you’ve played this game many times (and years) before, you likely know what is on the horizon.
As June passes by and we trudge on into the dog days of summer, the advertising industry sees what we’ll refer to as the “Summer Slump”.
This gives us a great opportunity to educate our publishers what causes this temporary dip and how long you can expect it to last.
JANUARY AND JUNE…THE PERFECT STORM.
First, and the most relevant right now, is that many advertising agencies see the end of June as the end of their fiscal year.
A fiscal year is a 12-month period that organizations use for budgeting and forecasting.
Typically any budgets that were set for any fiscal year would need to be used before the end of the fiscal year, which is why we see a huge dump of advertising money into the market in the month of June.
Second, advertising budgets are often increased when they can make the biggest impact on the consumer. CPMs and fill rates skyrocket around annual holidays like graduation season, Mother’s and Father’s day, Thanksgiving, Black Friday, and Christmas because this is also when people have reasons to spend money. This is why we can always count on Quarter 2 and 4 to be the highest earning quarters.
Additionally, brands tend to spend the least at the beginning of a new quarter, and more towards the end of the quarter.
We can show you this advertising spending trend by comparing the fill rate and the CPM for each month.
THE WHAT AND THE WHAT?
Let me define these two terms for you so you can better understand what I am talking about.
The fill rate is a the number of delivered ads divided by the number of total ad requests. For example, if 100 ads were requested on a page in a day, and only 90 were filled, that would mean the fill rate for that day was 90%.
BUT WHY WOULDN’T THE FILL RATE ALWAYS BE 100%?
100% fill rate is is almost always an impossible number to achieve if you’re not relying on waterfalls and remnant advertising.
Network errors, timeouts, and price flooring (the minimum price we would allow an advertiser to pay to buy an ad on your site) mean that not every ad is going to be filled every single time.
When advertisers are spending more during busy months, say around Black Friday or Christmas, we see fill rates skyrocket.
During slow months, we will see fill rates drop off as advertisers are not willing to meet our minimum price floors.
Keep in mind that at Mediavine, we don’t want 100% fill. One hundred percent fill sucks. We even wrote a blog post about why.
THE ALL IMPORTANT CPM.
CPM is an industry term, and stands for cost per mille (cost per thousand). This is a pricing structure used to define the price of 1,000 advertising impressions. If an advertiser is willing to pay a $3.00 CPM, that means they are willing to pay $3 for every 1,000 times an ad is shown.
When advertising budgets are high, we see higher CPMs as more advertisers are in competition for the same limited ad space and are willing to pay more to get their ad in front of a limited pool of users. During slower months, you will see these CPMs drop off as there is less competition in the marketplace, causing the advertisers not to have to spend as much to get the space they want on your site.
TIME TO MAKE THE DATA!
Let’s let some data tell the story. We’ve compiled the data from our network from the year 2016 into the graph below. We took the average CPM (eCPM) from each month and multiplied that with the fill rate to get a number that shows how advertising spend changes month to month.
As you can see the new year starts off as slow as it will get all year, slowly increasing through the end of March and Quarter 1.
Quarter 2 takes a slight dip before slowly increasing through the end of June and Quarter 2.
Quarter 3 starts off slowly, and then good things start happening and continue happening through the end of the year, when the glorious quarter 4 budgets roll in and we see the highest spending of the year.
HOW DO I STEM THE PAIN THAT JULY AND JANUARY BRING?
Our advice is to stock up on wine at the end of December and June. (Just Kidding. Maybe.) Actually, there are steps that you can take that will help you feel the pain a little less.
Pay attention to your site health!
Sites who are optimized according to our site health checks see the best earnings in the good months and the bad months.
The goal is to make your advertising inventory as attractive as it can be at all times of the year, not just the good times.
Go through your top 10 most trafficked posts and make sure they meet all of our recommended guidelines. Sometimes it’s as easy as adding a new paragraph of content, or splitting up a larger paragraph into smaller paragraphs that can make the difference.
Dust off that old content!
Maybe you have a an old post related to weight loss that hasn’t seen much traffic lately. Late December would be a perfect time to update that post (think new year’s resolutions) and push the post into heavy production in your social media channels as soon as January begins.
In June, maybe you have a great 4th of July recipe or party idea. Make sure it’s updated and optimized, and start pushing it hard, right through the 4th.
It’s all about appealing to the limited pool of users that are attractive to the advertisers that are still bidding on your inventory!
Faster pages means a higher fill rate Every. Single. Time. No matter what time of year.
Fill rates will suffer from slow page load times, especially when with the heavy focus on viewability for Mediavine publishers.
Faster page speeds means more ads on your pages, and less of a hit on your wallet during the slower months.
The good news is that we are always here to help you with these three items and any other questions as we ride into this slow time, and help is just an email away at email@example.com
And when you log into your dashboard on July 2nd and see the likely dip that July 1st brought, try to remember the words of Dr. Seuss: “Don’t cry because it’s over, smile because it happened” and know that Q4 is just around the corner!