It’s January and as a publisher, you might be faced with a recurring issue. That is, a drop in ad revenue. You can see that we mentioned it as a “recurring” issue as it happens every year.
Why does this happen every year?
It’s a simple advertisers’ logic. The second and fourth quarters are the ones with the most holidays. There is a lot of spending from people during these quarters (because of Thanksgiving, Graduation season, Christmas, New Year, etc.) so the CPMs raise.
On the contrary, the first and third quarters will drag your revenue down as people won’t be spending as much. This means you’ll experience:
1. Decrease in Fill Rates:
As users aren’t going to actively buy, advertisers wouldn’t like to compete to fill all your ad slots in this month.
2. Slump in Bids:
When you partner with Ad Exchanges/bidder partners they’ll connect you with advertisers (thousands, if not millions of them). But, not all advertisers will spend around the year. To put it another way, you probably won’t receive as many active bids for your impressions in January.
Hint: Want to test it? Install the header bidding extensions and see whether you’re getting the bids and compare it to your previous month or quarter.
3. Sudden drop in CPMs:
CPM rates are directly connected to advertisers’ bid. The CPM rates go down in January since advertisers decrease their bidding frequency, even for the sites that serve and hold the maximum impressions throughout. Out of all three reasons, a decrease in CPMs is the most important issue that impacts publishers’ revenue.
Tips to Combat Drop in Ad Revenue
1. Set a Lower Floor Price
You must have set a higher floor price, especially in the last month. But January is different and having a higher floor essentially filters several bids before they even participate in the header auctions. Hence, lowering the floor price leads to more bids that directly influence the eCPM. This is perhaps the first step you need to take this month. There are two ways to adjust the floor prices.
a. Static – Set a floor price based on your previous year’s eCPM and iterate it based on the fill rates.
b. Dynamic – Use Target CPM that alters the floor prices to capture more bids.
2. Experiment With Video Ads
One of the easiest ways to increase ad revenue is to run video ads. You can set a video ad unit that auto-plays when the user hovers over it. Here’s a quick guide to help you run video ads via Google Ad Manager.
You might be wondering whether the advertisers will bid effectively for video ads. Of course, they do. As videos are widely reported as the driver of higher engagement and brand awareness, you can still have advertisers competing for your impressions. However, it is important to check with your SSPs to analyze the market demand beforehand. Not all the demand partners will bid for video ad requests, so test and activate the right ones.
3. Include Supplementary Ad Units.
Agreed, adding more ad units might result in lousy user experience and higher bounce rates. But, when you know how to do it, you can yield better results.
For instance, our publishers use reflex, to create custom ad units only on under-monetized webpages. Notice that we are suggesting to create ad units on under-monetized webpages. That’s because those pages naturally will be having a lesser number of ad units. Hence, your user experience won’t be affected.
Some publishers dynamically load ads as the user reads the content as well.
4. Pick the Right Ad Sizes and Formats
At Automatad, we constantly work with publishers to kick out the inefficient ad formats/sizes and run suitable ones. This might seem less important during your peak revenue seasons, but now they can play a significant role.
Analyze your demand partners and identify the top-performing ad sizes and formats. Then, make sure there is competition among the advertisers for that size and format. If both are good, you should try switching to them. Again, it is advised to test, measure, and run.
For reference, check our article on the best ad sizes and formats.
5. Header Bidding
A publisher should consider implementing header bidding on its site. Header bidding permits the publisher to serve inventories simultaneously to demand partners instead of sending in sequence. Though header bidding is not easy to implement because of its technicalities, it increases the ad revenue of a publisher.
Wait, I already run header bidding? What’s next? No problem, we have a definitive guide to optimize it.
6. Enable Ad Refresh
You can enable ad refresh on your site(s) to double/triple impressions and hence, the RPM. If your users are highly engaged and stay on a page for quite some time, you can try ad refreshing solutions like AXT to refresh ads based on both user activity and ad viewability.
If you end up refreshing ads without considering them, you’ll be affected in the long run.
7. Optimize Ad Placements
Let’s say you have two landing pages, X and Y. Calculate the RPMs of both and try to find out why one is higher over another. If both are same, A/B test them.
Change the layout, ad placements and measure how long a user is staying on the page. A simple analytics tool like GA and Hotjar would be enough to help you with it. Once you got the optimized one, run it to see the higher revenue. Wait, we have also detailed how to find the best ad placement on your site with the help of free tools in the market.
Do not panic, stay calm – This is certainly normal and a common pattern.
Make sure it is seasonal – Sometimes, your ad stack might be causing all the trouble (fix it). The easy way to ensure is to compare RPMs from this year and the last year over the same period. Ideally, there shouldn’t be an enormous difference in revenue/eCPM.
Even though seasonal drops are common, there is always a way out for publishers. We worked with publishers across the globe and helped them to mitigate the issue. These 7 ways would be a great start to optimize your inventories.
What methods have you tried and succeeded? Share your stories in the comments and help others. Need more personalized recommendations? drop us a line.