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Seasonal Trends in Advertising and Revenue

Last Updated: Jun 01, 2016 07:05PM PDT

Seasonal Trends in Advertising and Revenue

This article presents seasonal trends in ads and revenue for Twitch Partners and Partners to-be. 

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Twitch has provided this transparent and educational exposé regarding the way Twitch Partners are compensated for their content, with the intention of bringing the revenue discussion to a more fruitful level for the entire community. 

One important factor to keep in mind before continuing is that Twitch has elected to offer the flat-rate CPM model based on feedback from the majority of Partners that they would prefer more stability in monthly revenue. This helps protect Partners from the CPM factor in seasonality.

The time of year affects media costs, media effectiveness, and consumers’ buying patterns. In other words, depending on the time of year, CPMs and fill-rates for online advertising can fluctuate drastically. Online video is no exception to this trend, so it is important that Partners are educated and aware of how seasonality might affect your monthly revenue potential.

Throughout the year, advertisers typically spend opportunistically to reach consumers when they are most likely to spend. You can probably guess many of  these times of year: start of summer, back to school, and of course the holiday season. In the gaming world, a lot of the spend from the gaming industry comes around launches, and most of the big budget titles which command the most spend are also targeted to launch around the holidays.

Within each quarter, most brands are spending at the end of that quarter and spending least at the start of it. So, as an example, in the first quarter of the year, January has the lowest spend, with spend increasing slightly in February, and March seeing the largest portion. This means in January, CPMs are quite low, and fill-rate is also low since brands are not buying much inventory.

Comparing quarters, Q1 commands the lowest overall budgets, while Q4 commands the highest. This is mostly tied to the holiday season, but also partially in the nature of the way companies spend their budgets. Often times they are testing out campaigns and tweaking creative and demographic targeting throughout the year, and by the end of the year they have more data to work off of and can more comfortably and accurately target their advertisements to the appropriate audience.

Seasonality, of course, also varies by countries depending on each country’s cultural traditions.

In summary, the best way to prepare for seasonality is to budget the following way:

  • Months with LOW spends, in very rough order of least to most: January, February, April, July
  • Months with AVERAGE spend, in no particular order: March, May, August, September
  • Months with HIGHEST spend, also in rough order of least to most: June, October, November, December