In the world of advertising, it’s a no brainer that the holiday season is the biggest sales season of the year, and with that, the most competitive time of the year for advertising. So, it should be no surprise that along with more competition comes an increase in ad rates.

During the holiday season, ads that are purchased via bidding can expect to see an increase in ad costs. An example of ads that would be purchased at a bid is Google Search Ads. Once a campaign is created, your ad competes with other ads to gain ad space on Google Search. Taking in factors such as targeting, landing page, ad copy, and budget, the amount that you pay per ad will be based off how your ad compares with other ads. As more competitors enter the field, ad prices can expect to increase due to limited inventory. It is the classic laws of supply and demand. As demand goes up and supply is unchanged, prices increase. As demand goes down and supply stays unchanged, prices decrease. Examples of ads that would be purchased at a bid would be ads that are purchased at a “cost per” model. This would include ads purchased at a cost per impression (CPM), cost per acquisition (CPA), or cost per click (CPC).

P: Price                 Q: Quantity

D: Demand         S: Supply

Many digital ads are purchased using bidding. If you are using any of the following tactics, you can expect an increase in pricing during the holiday seasons:

• Facebook/Instagram Ads
• Programmatic Ads (Video, Native, Audio and Banners)
• Google Banner Ads
• YouTube Ads
• Google/Bing Search

Ads that are purchased via direct publishers are generally purchased at a static rate which are ads purchased at a consistent rate regardless of competition. If you are purchasing banner ads via a publisher, they will usually run using CPM rates. However, if the ads are purchased at a static CPM rate from the supplier then ad prices don’t generally fluctuate unless otherwise stated. Any other tactics such as sponsored articles or takeovers may have a set rate that stays consistent during the holiday season. Holiday-themed articles may have different rates than usual as it will receive more reach than a normal sponsored article.

Various types of industries will see increased rates of competition than others. For example, retailers are far more likely to see higher rates via Google Search during the holiday season as it is their peak sales season. On the other hand, a surfing company won’t see as much competition as a retailer despite winter being peak season for buyers. This is because it isn’t a peak season for people to be surfing. Instead, a surfing company in Canada will see peak competition during the summer when the weather permits people to surf or take part in other outdoor activities. If the holiday season isn’t a peak time for your business, advertising prior to or after the holiday season would be something to take into consideration to get the best bang on your dollar.

With these factors in mind, you’ll have a better idea as to why it is costing more to reach fewer people, as well as whether you should consider shifting your ad dates to skip the peak ad season.