There are two elements to this, firstly media cost and secondly the audience’s level of engagement.
Let’s look at media costs:
It’s no surprise that at the end of Q4 brands turn to digital platforms to take advantage of the holiday season and finish up budgets. Advertisers fight for valuable advertising space, there is only a limited amount of advertising space after all and one of the greatest influencers on CPC is demand. Increased demand means lower supply which means a higher CPC during the holiday period.
Secondly, let’s consider the audience:
People are tired, they are distracted, their attention is divided and they are being bombarded with digital ads. Unless you are the Lego’s Harry Potter Hogwarts Great Hall ad that they are looking for they haven’t got time to click and explore. Audience engagement rate is low and as a result, the ads CTR goes down, particularly for nonseasonal products, which means CPC’s increase.
In contrast to the above, the CPC is typically at its cheapest at the start of the year which is why it’s so important to have a good strategy so that you can maximize ad profitability throughout the year.