Website Monetization Cycles and Seasonal eCPM Changes

In Text Ads on your Site are Not merely a Money Machine

After a few months with in text ads on your website, you will probably get used to the monthly payments and accumulated revenues. At this stage, many publishers tend to think of in text ads as a simple money machine. The integration was easy and after some optimization they require no maintenance. But then, sometimes the average earnings change – either up or down – and publishers hurry to ask: What happened? Before rushing into conclusions, it’s better to understand the industry in which in text ads networks operate. This can shed some light on revenue fluctuations. In text ads are not a merely money machine, they represent an entire online advertising market.

Three Market Factors

There are three main factors in the online advertising market that influence any website’s monetization. The first two stem from the human nature: both your visitors and the advertisers are after all real people with changing patterns of behavior that influence your earnings directly. The third factor has a more mechanical nature. As smart as they’ve become, the systems that manage in text ads have some limitations that also influence the levels of earnings. Let’s review these cycles one by one.

Online Advertising Cycles

The advertisers who buy online campaigns have cycles like any other advertiser. Most prominently, advertisers are subject to seasonal increases in advertising and of course to seasonal decreases. For example, in the US many advertisers spend much more around the shopping carnival that precedes the winter holidays around November and early December. Many website publishers experience a surge in earnings during these months. But then comes January and they see a decline in revenues. Before getting startled, simply remember that this is a living marketplace and when the shopping season is over, many advertisers also limit their campaigns. Some advertisers are linked to other types of seasons, like specific sports seasons. For example, if your website is suitable for ads related to a specific sport, you can expect lower revenues once the season is over.

Online Surfing Cycles

Just as advertisers have seasonal highs and lows, your website visitors also have repeated patterns of behavior year round. In addition to the shopping or sports seasons, you probably know that your website’s traffic changes with time. For example, during family oriented holidays, when people tend to spend more time with their families and less time in front of the computer, you may see lower volume of visitors and respectively, lower revenues.

But your visitors have additional behavioral patterns that are related to the method of website monetization. If you have a community of dedicated visitors who often return to your website, you might notice a slow decrease in click through rate (CTR) over time that would lead to lower earnings as well. The reason is obvious, once they get used to the double underline links, your visitors may tend to overlook them. When this happens, you should consider if this is perhaps good for the overall user experience, or alternatively, you may choose to change the links color or appearance, in order to attract new attention. The human eye is very sensitive to such changes.

Automated Campaigns Cycles

A third factor that influences your earnings is tightly related to the fact that the online advertising market is mostly governed by automated processes. While most systems try hard to spread budgets evenly over time, they can’t measure the spending every second. If a system is set to spread the budget evenly over a whole day, it would usually divide the budgets into hourly caps. But since there are no measurements every minute, within a single hour, there may be higher spending at the beginning of the hour, and once the hourly cap is reached, there may be a drop in spending until a new hour starts.

Similarly, many systems, including Google AdWords, offer advertisers as default to set a daily budget cap. For this reason, the beginning of the day may be more profitable for websites than the last few hours of the day. This phenomenon is most visible in the monthly cycle, where earnings in the last few days of a month could be lower than the monthly average, as many campaigns simply run out of money.

Why has my eCPM Decreased?

When you see a decrease in your daily eCPM, before getting startled, ask yourself whether this could easily be explained by one of these cycles. Has a shopping season just ended? Could it be the end of the month? In most cases, seasonal fluctuations are self explanatory when taking into account that in text ads are not merely a money machine, but are part of the online advertising market. Waiting a few days until the beginning of a new month or season would suffice in most cases and you will then see earnings going back up.

If you can’t identify a relevant cycle – from the advertisers, visitors or the automated systems – then it’s time to talk with your in text ads provider. Perhaps there’s something else. Sometimes an internal change or mistake requires taking care of. And in other times, it could be that some additional optimization is needed to get back on the natural waves of highs and lows. Understanding the seasonal peaks and valleys in your earnings graphs is a first step towards knowing when it’s time to act and when you simply need a little patience.