Understanding seasonality is important for businesses in general, but it also has important implications for PPC. The importance is even greater when employing automated bidding strategies designed to maximize a certain result (like clicks, leads, or sales).
Below, we’ll dive into exactly what seasonality is, why it’s important for your PPC campaigns, and how to adjust campaigns to give your company an advantage.
What is Seasonality?
Seasonality refers to the characteristic patterns or fluctuations that predictably occur in data over the course of a year. More specifically for PPC, we can observe demand fluctuations for different search terms at different times of the year. This happens predictably year in and year out, and can depend on things like the type of business and weather.
Seasonality therefore refers to the tendency of certain industries to experience higher search demand during specific times of the year. For example, retail businesses often see increased sales during the holiday season at the end of the year. Flower shops inevitably will see volume spikes around Valentine’s Day and Mother’s Day. Searches for school supplies spike when kids are preparing to go back to school in August and September. Many of these are obvious, but often the seasonality can be more nuanced.
Not only do events create seasonality, but weather can as well. Golf courses in Maine won’t see much search volume during the winter months when the ground is covered in snow, and searches for air conditioning units in Texas may spike in the summer.
Examples of Search Volumes
Let’s take a look at a few examples of seasonal businesses to get an idea of how seasonality works. We’ve selected a couple high-volume keywords for each industry to use as a barometer for overall search volume to observe monthly changes.
Tax Preparation (nationwide)
It’s not surprising that tax preparation services have substantial seasonality. With taxes due on April 15th each year, the majority of searches are being made to hire someone to get their taxes completed on time. It’s an insight into how Americans plan ahead as well!
Standard Deviation: 59% of monthly volume. The higher the standard deviation, the higher the seasonality effect on search volume.
The fact that there is a concentration of searches in January-March isn’t a surprise. At 12-14k/month, it far surpasses the 3-5k search volume seen throughout the rest of the year. Of course April is somewhere in between with last-minute filers.
Now, you may be thinking that this is an obvious one (which it is) and that your particular industry is not nearly as seasonal (which is probably true). That said, this is a great one to show the impact that failures to adjust to seasonality changes can have on a search campaign. Other industries may experience smaller (even 20-40%) fluctuations in volume, rather than 300%, but 20-40% is still a lot when you’re trying to be as efficient as possible.
From the numbers above, you know that budgets will need to be different in February than they are in October. Later, we’ll go over why that’s important and the impact that it can have on results and efficiency.
Skiing in Colorado
Here’s some classic winter popularity seasonality for you! If you’re searching for ski resorts in Colorado, chances are you aren’t doing it in May or June. That said, there’s still quite a bit of search volume in the summer as people start to plan their vacations. With the high competition of ski vacations, it may pay to book early, so the searches might be a little flatter than you’d expect.
Standard Deviation: 52% of monthly volume
Lawn Care in New York
On the other side of the weather coin, we can see the demand for lawn care services in New York State. With grass dead or dying from October-February, a solid half the year has very little demand for lawn care. Volume spikes about 10x to its peak in April as things come back to life.
Standard Deviation: 69% of monthly volume
Home Builders (nationwide)
Wondering when people are looking for home builders? According to Google search data, demand is strongest during Q1, sinks for most of the Spring and Summer, then demand bottoms out from September until the end of the year. December search volume is almost 30% lower than January, which is notable but not as dramatic as other seasonal examples.
Standard Deviation: 10% of monthly volume
However, it’s also important to understand that regional trends exist on top of industry trends. The nationwide numbers for home builders isn’t true for every state or area. The seasonality for Arizona is a bit flatter across the first eight months of the year, but then still shows a drop from September to December. Michigan, on the other hand, shows a steady decrease throughout the year.
Standard Deviation: 13% of monthly volume
Regional seasonality differences based on weather and temperature is very common. Northern states tend to have heat-based search volume spikes only for a few months in the summer, while the distribution is a bit flatter for states that are warmer year-round.
Longer purchasing decisions like home building tend to have a less dramatic impact on search volumes than short-term or more immediate needs, like snow removal or air conditioners.
Why Are Seasonal Search Volumes Important?
Now that we’ve established that seasonality for search volumes exists and is often pretty dramatic, why does it matter?
The answer lies in the popularization of automated bidding models. Over the past several years, Google and Meta have moved further and further away from Manual CPC – or even Maximum CPC – bidding strategies and have been pushing bidding strategies that focus on “maximizing results”.
Whenever a bidding model is maximizing something based on a fixed budget, it leaves the generation of those results up to various market factors. This blog covers one of the biggest determinants: available search volume.
If available search volume seasonality exists, companies do not change their budgets to reflect these fluctuations, and “maximize” models are in effect, then the cost per result is significantly influenced by seasonable volume changes.
It follows then, that if some companies do adjust for these fluctuations and others don’t, those that do are at a competitive advantage.
Automated “Maximize” Bidding Models
Note that the CPCs and conversion costs below are made up for illustration purposes. They might be a little higher than actual CPCs in the tax preparation industry, but really they aren’t too far off (depending on your service area).
Maximize Conversions/Value
The goal of the maximize conversions or conversion value models (when a target CPA is NOT applied) is to drive as many conversion events (or the highest value conversion events) as possible on a given budget.
As an example, let’s assume there are two tax preparation companies bidding on search ads.
Company A: $5k/month budget every month
Company B: $1k budget for every 1000 searches ($12k budget in March, $4k budget in September)
Based on the search volumes posted above, let’s assume that conversion rate is fixed and that approximately 120 leads are available in their market during March, and 40 are available during September.
March: With $17k in budget for 120 leads, this is how (all else equal) the leads should be distributed:
Company A: 85 leads @ $142/lead
Company B: 35 leads @ $142/lead
September: Here, we have $9k in total budget for 40 total leads:
Company A: 18 leads @ $225/lead
Company B: 22 leads @ $225/lead
So the results for each company for these two months:
Company A: 103 leads @ $155.34/lead
Company B: 57 leads @ $175.44/lead
Just looking at these two months, Company A is not only driving almost twice as many leads in total, but at a 11% reduction in cost/lead. Adjusting for seasonality makes your bidding strategy more efficient, putting you at a competitive advantage over companies that are just running fixed cost bidding without accounting for it.
Another important note is that failure to adjust for seasonality makes the system as a whole less efficient. Both companies are overpaying for leads in September because Company B is essentially bidding too much for the volume that is available. So both company’s lose (and Google wins).
If Company B were to recognize this and be less aggressive in September, they would stop paying for higher cost leads, but Company A would benefit as well.
Maximize Clicks
The other popular bidding model that maximizes impact would be the maximize clicks model. It’s virtually the same logic as shown above, except rather than maximizing meaningful results, you’re maximizing clicks. This gives Google a lot more leash to target as they please, often (usually) sending lower intent traffic at lower CPCs since the advertiser hasn’t stated a preference for quality, converting traffic.
In this situation, our “all else equal” situation does a lot more heavy lifting. We need to assume that both Company A and Company B have the same keywords and negatives in place and that their ads perform similarly for similar keywords. But as long as all that is true, we’d just duplicate the above calculations for clicks instead of conversions.
March: With $17k in budget for 1200 clicks, this is how (all else equal) the clicks should be distributed:
Company A: 850 clicks @ $14.20/click
Company B: 300 clicks @ $14.20/click
September: Here, we have $9k in total budget for 400 total clicks:
Company A: 180 clicks @ $22.50/click
Company B: 220 clicks @ $22.50/click
So the results for each company for these two months:
Company A: 1,030 clicks @ $15.53/click
Company B: 570 clicks @ $17.54/click
Again, we see Company A gaining a considerable advantage for adjusting appropriately to seasonal volumes, allowing them to drive more, cheaper traffic.
Below, I’ve provided a supply and demand chart of the movements described above, resulting in a higher overall CPC during periods of low demand and lower CPCs during periods of high demand if companies don’t adjust their budgets according to the seasonality. Listen, I know you don’t really care about the chart below. But I paid for a degree in Economics, so I’m required to provide this to help me justify it.
Effect During Low Seasons
During the low season, if companies don’t reduce budgets to reflect the lower seasonal volume, then the market as a whole will “overpay” for traffic.
If one company (like Company B above) does not adjust accordingly, it will drive costs up and there’s nothing that Company A can do about it. The entire bidding system is forced to pay more if they still want to drive leads, because Company B is essentially saying they’ll pay for a lot for leads during the low times.
Effect During High Seasons
During high season, if budgets don’t update to account for the increased traffic, it will push the overall costs down. This presents an opportunity to any company willing to increase they budgets, but allows companies with lower budgets to stretch their budget further.
Demand Spikes
If a special event causes an spike in demand, companies would need to adjust to the change in volume in the same way they would adjust for seasonality. Or going viral, as we’d say.
This can frequently around big announcements, like an announcement of the launch of a new iPhone will spike searches for it. Similarly, if a celebrity is seen wearing or using something (an intentional or unintentional endorsement), that can spike searches as well. Take for instance Lorraine Kelly’s rainbow t-shirt, Rihanna’s breastplates, or Kate Middleton’s long white coat. News stories can also cause spikes like this for different industries, like a feature on 60 minutes for example.
It’s times like this when having an expert at your fingertips can be helpful. That’s why at PPC Assist, we have on-demand experts who know how to respond to spikes like this.
Solutions
There are a few different ways to address seasonal changes in search volume and make sure you don’t overpay for results.
Strategy 1: Adjust your budgets based on seasonality
Like Company A in the example above, you can simply scale your budget up and down based on the search volume available. The advantage of this is that it will automatically absorb any opportunity during high demand times that your competitors fail to adjust for.
Another advantage here is that it won’t completely throttle volume if market rates increase or competitors are overpaying for leads (usually during low seasons). Even with your lower adjusted budget, you’ll be driving some leads, even though it’s at a higher cost than you should.
Google (or Bing) will do the best they can with the spend you allocate, and you’re pretty safe to allow things to coast on the PPC Assist model.
Strategy 2: Employ Target CPA or Target ROAS bidding
Adding a target CPA or target ROAS to your “Maximize Conversions/ROAS” bidding models will keep Google from increasing your bids too high in the event of increased competition for searches (often due to seasonality, but could be due to competitive or other factors as well).
The advantage here is it controls your ROI and makes sure you don’t go over your cost/lead or ROAS targets (as much as Google allows it, at least). If there are spikes of low-quality traffic, this will keep you from suffering too.
It would also allow you to scale campaigns up and down safely with the volume available. Theoretically, you could put an unlimited budget on campaigns and Google would just send as much traffic as it could based on the target parameters.
The downside here is that the spend on your campaign could get completely siphoned off. In our scenario above, if Company B sticks with their “maximize conversions” policy and is essentially agreeing to overlap for the leads that exist during low periods, then your stated cost/lead or ROAS may not be possible. In these cases, you essentially lose all of your volume.
This is also a viable strategy with PPC Assist, although it’s a good idea to put an alert in place to make sure volume doesn’t fall below a certain amount.
Strategy 3: Add a Maximum CPC to your Maximize Clicks campaigns
While we’re much bigger fans of conversion-based bidding at PPC Assist, some clients do prefer to stick with a CPC model. Which is fine, especially if you have an extensive negative list.
The pros and cons of this strategy mirror those described above on the Target CPA/ROAS discussion. It’s easy to grab extra volume and scales down nicely. However, there is always a risk that you can get squeezed out of traffic during low season or among increased competition.
This strategy works with PPC Assist as well.
Strategy 4: Active Management
For industries with quickly changing trends, active management can make sense. We won’t pretend that coasting on PPC Assist is perfect in every situation. Of course, we do make it possible to actively manage campaigns with our on-demand experts. Through PPC Assist, you can basically employ all 3 strategies at the same time through occasional reviews.
Active management can allow you to quickly change ads, adjust budgets, add negative keywords, or make other adjustments to make sure your campaigns perform at their best during a rapidly changing environment.
An agency, freelancer, or in-house professional can monitor KPIs and make adjustments on the go to weigh the pros and cons of different bidding models and increasing or decreasing levels of your “maximize campaigns”.
While in most cases we don’t believe that is necessary, it’s an advantage of having a dedicated professional (hopefully) keeping a close eye on your accounts.
Conclusion
If you aren’t prepared for seasonality, you’ll be at a disadvantage to competitors who are. Properly managing changing volumes intelligently can be a competitive advantage as search engines continue to push black-box, automated bidding models on their customers.
Even if it’s becoming increasingly foggy about what exactly you’re bidding on, you can still control how much you’re spending and understand roughly how much quality traffic by paying attention to seasonality data. Put it to work and increase the efficiency of your campaigns.
Want to learn more about the seasonality of your industry and area? Request a free account analysis to see if you’re a good fit for the PPC Assist program!
