If December is the boozy night out for publishers’ sales teams, then January serves up the hangover.
The glut of brand dollars flowing to publishers in the fourth quarter slows significantly in the new year, leaving publishers desperate for ways to make up the difference. As a result, many of them supplement the lower volume of direct deals by dumping more of their inventory on ad networks and exchanges. These changes, coupled with overall lower advertiser demand, create a perfect storm for publishers that hurts their revenue numbers.
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At Thought Catalog, for example, the January slump can cause non-guaranteed yield rates to sink by as much as 40 percent, according ad ops manager Cristina Calderin, who said that the site typically starts preemptively lowering its CPM floor pricing as early as late December. “Once January hits, we’re looking at the data, and as soon as we feel comfortable, we start to push rates back up.”
January also shakes up publishers’ overall campaign mix. While advertisers typically use the fourth quarter to push brand campaigns ahead of the the holiday season, many of those campaigns disappear in January, leaving publishers running far more performance-driven direct-response campaigns, which for readers means more retargeted ads.
“Page one of the direct-response playbook in programmatic is retargeting and for a lot of folks, it’s a one-page playbook,” said Matt Prohaska, CEO of Prohaska Consulting, which manages publishers’ ad sales. He said that publishers also use January to experiment with more high-impact ad units, particularly if they are launching new site designs.
But the January sales slump doesn’t affect every category equally. Sports publishers, for example, frequently see big numbers in January as brands lead up to big sporting events such as the Super Bowl and college football playoffs. Likewise, as Prohaska pointed out, publishers in the health and fitness space also benefit as brands run more campaigns aimed at people making New Year’s resolutions.
“Historically, these are areas where January actually helps publishers,” he said. “The advertising history has a nice way of having categories or events on the calendar that make up for losses in other areas.”
But while January can be a tough month for publishers, Sporting News Media president Rich Routman said there are ways that publishers can mitigate its effects. One tactic is to shift the sales mix toward more upfront deals, which makes it easier for publishers to weather any seasonal slumps.
“You can always lean on exchanges to get you through, but it’s a trade off,” he said. “If you become that publisher that always has URL-dependent inventory in the exchange market, that becomes a hole you can’t crawl out of.”
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