Money & metrics · also called seasonal trends, seasonal demand
Seasonality
Seasonality is the predictable rise and fall of traffic costs, advertiser bids and user interest at different times of the year, month or week.
Advertising has a calendar. People search for tax help in spring, travel in summer, heating in autumn and gifts in winter. Advertisers set budgets by month and quarter, bidding hard when customers are buying and easing off when they are not.
In search arbitrage seasonality moves both prices and they do not move together. Advertiser demand lifts RPC in a vertical's peak season. Competition for attention lifts CPC and CPM on the traffic source, and that competition comes from every advertiser on the platform, not just those in the same vertical. The spread can widen or vanish depending on which side moves more.
The familiar patterns: January is usually weak, because advertisers start new budgets cautiously after the holiday peak, though traffic is cheap. The last weeks of the year are the most intense (see Q4 effect). Month ends and quarter ends can swing either way as budgets run out or are used up. Shorter cycles within the week and day are handled through dayparting. Planning against last year's same-period figures beats planning against last month.
An example
Say a home-insurance keyword pays $1.00 a click in October and $0.75 in January. With 27% of visitors producing a paid click, revenue per visit drops from $0.27 to about $0.20. A $0.20 click that was comfortably profitable now only breaks even.
Related terms
Q4 effect
The Q4 effect is the rise in advertising prices and budgets from October to December, driven by holiday shopping, followed by a sharp drop in January.
Dayparting
Dayparting is scheduling ads to run, pause or bid differently at particular hours of the day or days of the week.
RPC (revenue per click)
RPC is the average revenue earned per monetised (paid ad) click: the "sell" price in search arbitrage. Convert it to revenue per visitor (RPV) before comparing it with CPC.
CPM (cost per mille)
CPM is the price of one thousand ad impressions; "mille" is Latin for thousand.
Vertical
A vertical is a subject area or industry, such as insurance, travel or home improvement, that a set of ads and keywords belongs to.
Scaling
Scaling is increasing a profitable campaign's ad spend to earn more total profit, ideally without eroding the return that made it worth growing.