Every year during the holiday season, app usages reaches their annual peaks, creating opportunities for publishers to maximize their revenue and advertisers to engage with their target audiences. The main way for advertisers to compete and win ad impressions is to increase their ad bids, which results in much higher eCPMs for app publishers who are monetizing with ads. As a publisher, there are several tips for increasing your eCPM you should follow beforehand to ensure you maximize the potential revenue. Smaato also released a full guide for the holiday season should it peak your interest!
Okay, so the holiday season is when publishers can make a huge portion of their revenue, but what happens afterwards? Come January, how does the market correct itself? We’ve dubbed this the “Holiday Hangover in eCPM”. Let’s take a look:
Why the eCPM drop off?
Publishers can only dream that the high payouts would stay high year round, however this is just not the case. Many industries have cycles, and this is just another example of one. Here are a few reasons why eCPMs tend to drop off at the end of the holiday season:
- The Competition Is Over (kind of) – During the holiday months, advertisers and brands are scrambling to reach consumers leading up to Black Friday in the US and Christmas. As the competition grows between them, as do the eCPMs. Once the main shopping season ends, there is a far lower demand from advertisers to get their share of impressions, thus the drop off.
- Fear of Budget Loss – Ad agencies, brands and marketers are all given yearly budgets based on how much they intend to spend. As the end of the year comes, many scramble to spend the remainder of their budgets as in many cases, if they do not, they will receive less for the following year.
For the purpose of this post, we compared over 2 billion impressions from the holiday season (December 2018) and the following month (January 2019), and have broken down the data into several categories that illustrate the eCPM drop off.
Note: In all of the charts below, the December eCPM data is used as the reference point (100%) and the January eCPM is shown as the % change. You can download the raw data table here to see the actual numbers.
The first breakdown we looked was via Ad Type. Interstitials dropped a bit (10.4%), Rewarded Videos as well (12.8%), however the largest drops we saw in eCPM were for Banners (40.8%) and Native Ads (51.9%).
The minimal drop in Interstitials and Rewarded videos is fairly self explanatory. Those ad formats tend to be dominated by app-to-app advertisements such as playables or app feature previews. Banners and Native ads however are far more susceptible to the post holiday season drop offs due to the influx of brand campaigns that inflate the eCPMs during the holiday season.
Next we looked at Ad Networks who showed Interstitial ads during and after the holiday season. We can see that the majority of the ad networks had a decrease (ranging from 10% – 30%) with Ironsource and Vungle being the only ones that had an eCPM increase.
Looking at Rewarded Videos, the results here are fairly similar to that of Interstitials. The ad networks’ eCPM dropped (from 2% to 27%) with Unity and Mopub having a slight increase from December to January.
Lastly we look at Banner ads which had the most drastic decreases post-holiday season. All of the ad networks here dropped in eCPM ranging from 41% as high as 65%. The reason for this decrease, as mentioned earlier, is due to banners being the most popular ad format for brand advertisers and after the holiday season is over, their spending drops.
Post Holiday Season Strategies
For publishers, despite the dropping eCPMs, the post-holiday period brings a significant opportunity for the user acquisition teams. As the eCPMs drop, so do the CPIs (cost per install) allowing for a big influx of new users to the app if they adjust their budgets. A previous study by Kongregate showed that with a 20% increase in CPI, publishers can see a 100% increase in traffic.
A strategy often used is taking a large portion of the high revenue gained during the holiday season, and investing it back into mobile user acquisition campaigns post holiday season when ad bid competition is far less intense.
We’d love to hear your thoughts on the breakdown and some of your strategies you use before, during and after the holiday season.
Meanwhile, feel free to download our Monetiation Benchmarks report.