Seasonality, CPMs, and you

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Last updated: March 2021

As the new quarter begins, you may have noticed a drop in your CPMs. Seasonality (looking at how you — and the ad industry as a whole — are affected by the time of the year) impacts advertiser[2] spend and thus, CPMs. While some verticals are impacted more than others, it’s important to understand how seasonality affects CPMs as they play a key role in forecasting[3] and predicting revenue, and benchmarking.


Measuring trends on a monthly or quarterly schedule can be a difficult task as they tend to change over time. 2020 was a rollercoaster for publishers. Q2 was extremely weak as businesses strategized for how to handle business in the pandemic. 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 had been all year. CPMs hit the highest values we’ve seen in the last two years in Q4 — you can probably thank stress spending for that.

Advertisers typically plan their spend based on monthly and quarterly targets. As a result, we generally see lower spend at the beginning of a month or quarter, and higher at the end. Advertiser spend also increases significantly for major consumer events like Back to School, Black Friday, Christmas, and Super Bowl Sunday. For each of these events, publishers typically see a corresponding increase in CPMs.

As Q1 began, you may have experienced your lowest CPMs in January as both consumer spend and traffic decreased. With CPMs fluctuating month over month (Figure A), as we move into March, you may experience your highest CPMs of the quarter. In 2020, we saw the opposite of that with the COVID-19 spreading worldwide and panic setting in. The panic continued into April with a significant drop of -21.05%.  

What we saw in Q3 were CPMs rebounding and significantly increasing in Q4. We saw a small but noticeable increase of CPMs on October 13 which could be attributed to that quarter’s Amazon Prime Day. The high CPMs in November can be attributed to American Thanksgiving and lasted throughout Black Friday and Cyber Monday. CPMs continued to rise into December.

Figure A: Monthly CPMs – This is aggregated publisher[6] data from January 2020 to December 2020

% change (over January)% change (over previous month)

When you look at quarterly performance[4], rather than monthly, there is a pronounced drop in CPMs at the beginning of every quarter as advertiser budgets reset (Figure B). Overall, CPMs increase steadily through Q3, with a significant jump in Q4 around Black Friday. In this example, even with low campaign[7] spend in July and August, Q3 out-performs Q2 as CPMs jump in September. It’s normal to see an increase in CPMs in the weeks leading up to a new quarter. This is a result of advertisers trying to complete their quarterly campaigns by buying the rest of the inventory[8] needed. 

Figure B: CPM[1] drops – Aggregated publisher data shows the CPM trends for a typical three-month period.

Looking at quarterly performance (Figure C), we see that, overall, CPMs decreased in Q2 as a result of the pandemic and steadily increased through Q3, with a significant jump in Q4. As previously mentioned, even with low campaign spend in July and August, Q3 outperformed Q2 as CPMs jumped in September. 

Figure C: Quarterly CPMs – Aggregated publisher data from 2020.

% change (over 1st quarter)% change (over previous quarter)
1st quarter0.00%n/a
2nd quarter-5.30%-5.30%
3rd quarter26.77%33.87%
4th quarter64.59%29.38%

Seasonality with Freestar

For 2021, we expect ad tech[9] trends such as changes to cookies, pagespeed performance., and data-driven distribution to impact CPMs. We understand that publishers can experience pain points with seasonality, especially when CPMs do not increase as much or as fast as expected. At Freestar, we help publishers maximize their revenue as these industry changes occur. For example, before the CCPA came into effect, we provided our publishers with recommended steps and our Customer Success team provided support throughout the whole process.

Your experience throughout the year may vary — not all verticals are equally impacted by seasonality. If your vertical is one that is more sensitive to seasonal fluctuations, use the trend information we’ve discussed to help forecast revenue on a quarter-by-quarter or month-by-month basis. It’s also important to note that most publishers experience seasonality, so it’s important for you to be aware of how seasonality impacts your site monetization.

Our Customer Success team monitors site performance and compares performance to network-wide trends to better understand and advise on site changes. We are always looking for ways publishers can improve their site monetization to ensure they are maximizing revenue to reduce the impact of any significant seasonal fluctuations.

At Freestar, we optimize your ad stack performance with a combination of reporting and analytics, and diverse demand. We optimize our publishers’ ad revenue with techniques like lazy loading[5], managed refresh, ad layout, and A/B testing suggestions.

Interested in learning more about seasonality? Contact us to find out how it affects your site. If you aren’t a Freestar customer but want to learn more about Freestar’s solutions, get started today.

1. Cost Per Mille/Thousand [CPM] ( CPM ) Cost per mille, or thousand (mille = thousand in Latin). A pricing model in which advertisers pay for every 1000 impressions of their advertisement served. This is the standard basic pricing model for online advertising. See also CPC and CPA.
2. advertiser. The company paying for the advertisement.
3. forecasting. Forecasting can usually be done through an ad server and helps publishers estimate the amount of ad inventory their site or app has available in the future.
4. performance. A form of advertising in which the purchaser pays only when there are measurable results.
5. lazy loading. With lazy loading, instead of all the content of a web page being downloaded and loaded all at once, content only loads when the users visit that specific part of the screen as they scroll down. The most significant advantage is saving on bandwidth usage which is especially important in countries where internet speeds are low, and data costs are high.

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