Let’s begin this 2023 preview post by addressing the elephant in the room: December 2022 was soft, or underwhelming, compared to previous years. Moreover, January 2023 is down as well …
What is Q4 and what does it have to do with digital advertising?
So much more than you think.
When is Q4?
Short for “quarter four,” Q4 is common shorthand for the fourth tax quarter of the calendar year — October, November and December.
Also known as the three months when the advertising magic happens.
If you’ve been at this for awhile or are even slightly familiar with how ad revenue changes by season, you probably know that a large portion of advertising spend occurs during the fourth quarter.
Advertisers pay more for impressions as demand increases, making publishers more money. Average CPMs, fill rate and therefore, RPMs, are typically the highest of the year.
Why does advertising demand increase in Q4?
There are several factors that contribute to increased advertising demand in the Q4 months. The two biggest:
1. Budgets are tied to calendar years
Many (probably the majority) of advertising budgets are allocated for calendar years, thus coming to an end in the fourth quarter. (Others are tied to companies’ fiscal years, but that’s a subject for another post.)
In a perfect world, budgets would be evenly spread out over 12 months, but that’s not how it works. Most budgets and campaigns are “back loaded,” leaving advertisers scrambling to exhaust, or spend the bulk of theirs at the end.
2. Christmas and other Q4 holidays
Holidays that fall during Q4, namely Thanksgiving and Christmas, are the other major driver. Historically, many companies finally turn a profit on the day after Thanksgiving. This is actually how the term “Black Friday” was coined.
It’s no coincidence that this is closely mirrored in digital advertising.
Beyond e-commerce stores adopting similar practices with their own Cyber Monday deals, advertisers with real world products and consumer goods run major campaigns to get you online and into their stores.
“But I made less money in October than September! This Q4 is terrible!”
While Q4 technically means October-December, in reality, when we refer to “Q4” in the industry, we’re mostly thinking in terms of a much shorter period beginning on Black Friday and ending a few days before Christmas.
Part of that goes back to the cyclical nature of advertising and budgets.
At the end of each quarter, the final months and weeks are when budgets are coming to an end and the spend is highest. Conversely, at the beginning of any month or quarter is when budgets are just beginning and spend will likely be lowest.
Counterintuitive as it may seem, Q4 is no exception.
The end of September and Q3 is no slouch when it comes to ad revenue. When comparing it to the early days and weeks of October, you might be a little underwhelmed by the alleged windfall of Q4.
Fear not. If you’re reading this, we’re almost to the end of November and things should have ramped up nicely in the past couple of weeks. Best of all, Q4 is about to begin in earnest right about now.
What niches, or genres of sites benefit from Q4?
Glad you asked. That one’s easy: All of them.
It may not be a busy time of year for the particular genre or niche of site you base your content around. You may run a travel site specializing in summer destinations, for example, or a back-to-school blog.
It doesn’t matter.
What counts is how the bulk of advertisers spend, not the few that love your site in particular, because it’s larger-scale auction dynamics that drive higher CPMs. You’re going to see increased demand as many more advertisers compete for your inventory.
This is why RPMs change, even if traffic doesn’t.
Does Q4 impact display or video?
Yes to both. While you’ll see an increase in display ad performance, you’ll likely see an even bigger increase with video.
How do you take advantage of Q4?
By following all the advice we give year round for optimizing your posts and improving your RPM. The Mediavine Content Upgrade Challenge is a great starting point, especially during Q4.
“But I get all of my traffic in Q1!”
We know. You can’t always control organic traffic.
If you run a diet-driven site and those New Years resolutions are why and when you see the most volume, scheduling your best content for Q4 doesn’t really work.
Instead, try thinking about total revenue rather than just RPM.
As we mentioned in our recent article about what performance is, we discussed how it’s less of a defined set of numbers and more about measuring the right things, making smart comparisons and looking at the big picture.
Take your traffic when you can get it and forget trying to “time” it with seasonal ad revenue spikes. Traffic is traffic and money is money. Look instead at overall revenue in January and don’t obsess over RPM.
Grow your traffic, turning new readers into loyal users and optimizing content for peak performance regardless of the season. Long term, year after year, this hard work and comprehensive approach pays off.
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