Now that we’re approaching the mid-way point of the first quarter, you’ve likely settled into the fact that once again Q4 and Q1 are vastly different when it comes to the pace and sheer volume of activity. You’re also keenly aware that the Q1 lull could have an impact on the next three quarters.
If your cost per impressions (CPMs) and fill-rates are colder than a bomb cyclone in January, here are five actions you can take to weather the remainder of the Q1 storm and end this year strong.
1. Don’t panic
Having studied the history of the ad tech market and closely analyzed its patterns for years, the dip in CPMs and fill-rates is typical for January and throughout Q1. This very predictable pattern has shown that Q2 is stronger, followed by the touch of a summer slowdown in Q3, and then things go back into overdrive with the frenetic pace of Q4. Knowing these cycles exist should provide some comfort. Yet it might not always quell the pit in your stomach, especially when your finance and executive teams are looking to squeeze a strong ROI even though fewer opportunities exist. The key to making the most of Q1 is to think about your business in a holistic way, not solely with a quarter-to-quarter mindset. To do that, please keep reading for more specific recommendations.
2. Adjust your CPMs
During the coldness of Q1, reduce your CPMs to align with the decreased market activity. Historically, the Q1 market tends to be 25 to 30 percent lower than Q4, on average. Yet before you make a sweeping move like reducing your CPMs by 25 percent or more, reach out to your channel partners and ask them what they’re seeing with regard to the liquidity of demand. Based on your experience and research, as well as your partners’ insights, you’ll find the CPM percentage decrease that’s right for your business.
3. Analyze your performance and progress
While expectations are low for Q1, this is not to the time to make only a few adjustments and wait it out in anticipation of a more fruitful Q2. After you make adjustments to your CPMs, you should start to see an upward trend and the data may also uncover areas of growth. Along these lines, use this slower period to explore new opportunities with potential partners. For current relationships, assess your partner program by measuring its success and using the extra time to gather feedback from your partners for continuous improvement. As you look more closely at your results and the factors driving them, you’ll be able to make sound recommendations that will help shape the remainder of your 2018 strategy.
4. Test, test, test
Q1 is perhaps the best time of the year to test different optimization strategies because it represents the lowest risk. You know all those great ideas you’ve been stockpiling? Now is the time to put them into action. For example, test pricing, experiment with new ad formats, and try new programs with partners. Don’t be afraid to experiment – on a limited basis – and see what it yields. Keeping in mind that overall CPMs and fill-rates are lower, be sure to measure your results not by overall percentage increase but by improvements from this period over last year.
5. Reconnect with your community and sharpen your skills
Another way to use the Q1 lull to your advantage is to use this time to deepen relationships with partners, or cull some. Also, it never backfires when you get smarter about the industry by catching up on the latest trends and news or mapping out which industry shows you’ll attend this year. Don’t think of Q1 as a break in activity. Rather, it’s a shift in priorities.
Don’t hold your breath waiting for Q1 to end. You’ll miss out on great opportunities to firm up your foundation for the year and identify new ways to work within the ad tech ecosystem. Along with these actions, remind your executives about the annual Q1 slowdown cycle and show them what you’re doing to position the company for a strong 2018.