Why Do Digital Ad Prices Spike in Certain Times Of The Year

· By Matej Harangozo

Why Do Digital Ad Prices Spike in Certain Times Of The Year

Why do ad prices move up and down all the time? Sometimes they're too expensive, sometimes they're cheaper. What causes the ad prices? The demand on these ad platforms to go up or down. Let's discuss that today. What's up guys. My name is Matej. Another day for Music Biz Daily. And let me touch upon a topic. I have definitely talked about this before, even on my podcast two years ago and definitely through many videos. But why do ad prices or your cost per click or cost per action or cost per view kind of fluctuate? And sometimes you can achieve a very low on. Sometimes you can they are a lot more expensive. So it has mainly to do obviously with the supply and demand of how many people want to run ads. And when generally do people, companies, shops, you know, services want to run more ads generally around particular holiday seasons or peak demand times for that particular industry. Right?

So we just got through a major one. And this one was very interesting because, look, four years ago, even though I was doing digital marketing here and there from my own company and my own brand and things like that, I did not have a digital marketing agency. And the reason I say four years ago is because that was when the last presidential election was right. We already know, and I've talked about this many times, that the end of the year quarter for mainly starting at Halloween, but really primarily on Thanksgiving, Black Friday, Cyber Monday, all the way into Christmas. It's a peak time for running ads for almost any company in the world that has gotten used to running ads.

So that cost goes up. But this year we've had the reports that I read. It was about nine billion dollars spent. And think about this is in the U.S. They're not targeting outside of the U.S. In the U.S., nine billion dollars were spent from a thing like July of last summer of 2020 till about the elections like November 4th, November 5th. And even after that, a lot more money was spent because of the Georgia elections. But nine billion dollars of demand for ads were infused into YouTube, AdWords, Facebook, Instagram, potentially a little bit of even Snapchat, perhaps even Tik-Tok a little bit. So you can imagine how much that drives up the prices. So it was more than I expected and I was expecting that holiday rush of Thanksgiving all the way up to Christmas.

But I did not realize how much of a factor the presidential elections were until I researched how much money was actually spent. Right? But again, holidays and these types of different events always jack up the prices because there's more entities trying to run ads and potentially targeting your particular audience. Now, it can get more complex than that. Let's say you are strictly just targeting people that like comic books as an example. Right? You may not experience such a hike because that particular niche, you know, defined audience may not be targeted by the politicians or that politicians may do broader targeting by age, by, you know, maybe certain interests like a Democrat or Republican or independent or maybe about social issues and things like that.

But, you know, comic books in that time, maybe. So there's a lot of things to consider, but generally for everybody, it spikes. For me this year, I've had to double my budget for running ads every month just to reach about 60 percent of the output that I normally can outside of these holidays, which is crazy. I mean, there were almost three times, sometimes three point five times as expensive to run ads between Thanksgiving. And I mean, really, it started sort of September, but thanksgiving to Christmas. Right?

So the reason I'm making this video, because I want to condition you to think about these different holidays. So what is another major holiday is coming up next. Right? It's going to be Valentine's Day, February 14th. So my recommendation for that for four days before Valentine's Day and maybe another one or two days after, I would either lower your ad spend unless you have you know, you just want to maintain your budget. But this is also a good time that if you are marketing to foreign countries, that makes sense for your particular brand because you can go there and tour, perform or whatever, even if you can’t. But even if you just want to saturate a certain foreign country, because that's in your future plans to go there and perform, you can maybe increase your budget to those particular regions and increase your budgets here in the U.S. And Canada. Right?

But you have to consider do those countries also celebrate Valentine's Day? Right? Because it's different for every country in the world. For example, when Thanksgiving is happening here in the US, advertising in England and Germany may be wise because they don't necessarily have Thanksgiving, but Christmas is the same. Black Friday now, you know, since I've been going back to visit my family in Europe, Black Friday has been sort of adopted by every European country. At least everybody is at Black Friday now in the Western world, maybe even in Japan and South Korea? I don't know that for a fact, but you have to consider these things right.

So, again, when these holidays come Presidents Day, July 4th or these different events, you can shift your budgets accordingly. But you have to make sure that whatever region or demographic you shift in your budget too it's not being affected by the spike of demand for advertising for that particular holiday. So, you know, it's really not that complex. You can make it complex if you go too deep. But I just want to leave you with that information. I want to repeat it every year because now we're in January, the price has already dropped like three-fold. Like I said, literally, I'm back at the old rates that I was at our cost per, you know, cost per conversion, cost per lead, cost per click, click through rates, and all of that, they came back down. But that's what I'm saying, is that the cost is not. That's like one of the latter things we consider.

The other things that we consider are the different conversion rates, the pixel conversions, the action conversions, the click through rates and the different parameters that we're really looking at. That's what we're looking at. If those don't change, then you're in good shape. The price will change. But that's the ones we're looking at. So, again, if you hit the budget, sustain it, if you don't lower it, throw it somewhere else where the market has not been affected by that particular holiday.