We’ve all been there: a client asks for a forecast of their ROI or results ahead of time. An unnerving experience - is it better to overestimate performance or underestimate performance? Or, can we accurately predict this at all?
Luckily, the answer is yes! While we (unfortunately) can’t see the future, we can leverage historical data and market insights to forecast search demand and seasonality trends ahead of time. Let’s explore how in this article.
1. Introduction
2. Table of Contents
4. Why Is It Important To Understand Seasonality for PPC?
5. How Can I Accurately Forecast Seasonality and Changes in Demand?
Broadly speaking, seasonality is the pattern of changes that occur within different seasons and/or times of year. For example, how in the US we expect snow in the winter, sun in the summer, and brown leaves in the fall.
When it comes to marketing, seasonality generally refers to the peaks and troughs in demand for a brand, product, or service. As well as seasons of the year, seasonality could also be used to refer to the back-to-school period, a holiday such as Thanksgiving (including Black Friday!), or a national day of celebration such as ‘Mother’s Day’.
The vast majority of products and services experience peaks and troughs in demand depending on the time of year, another example of this is financial years for many B2B brands. No matter your company's industry, shape, or size, understanding seasonality and fluctuations in demand is critical for marketing, sales, and business success.
There’s nothing worse than getting to your client’s peak season and running out of budget. While many agencies will split a client’s desired annual budget equally over a year, the best agencies know that this won’t deliver the best possible results. For example, an eCommerce brand sells women’s winter jackets. Does it make sense to spend $5,000 a month every month throughout the year on advertising? Or, does it make more sense to plan with peaks and troughs in demand in mind, and budget to capture this accordingly?
By understanding seasonality trends, you can effectively allocate your budgets to gain the best possible results throughout the year, every year. For example, for winter attire, you may decide to pre-plan an upweighted spend between November and February (depending on the climate and seasons within the country(ies) you’re targeting) and to downweight spend over those warmer summer months.
In visual terms, if we had an annual budget of $60,000 to utilize, we’d expect to see something like this:
|
Season |
Winter |
Spring |
Summer |
Fall |
|
Spend |
$30,000 |
$10,000 |
$5,000 |
$15,000 |
Instead of this…
|
Season |
Winter |
Spring |
Summer |
Fall |
|
Spend |
$15,000 |
$15,000 |
$15,000 |
$15,000 |
… to more accurately meet and capture demand. With that said, let’s understand how to forecast this with accuracy.
There are multiple methods that we suggest using in conjunction with each other to calculate seasonal demand.
If your brand has been running for a while, you’re likely to have a good idea of the annual fluctuations in demand. However, for data-driven decision-making, your analytics are a crucial tool to consult.
Whether you have web analytics such as GA4, social media analytics, or data from a POS system, these figures will give you an accurate indication of demand over a year.
One of the most accurate sources of demand is search volume data. There are a few methods of accessing this. Search volume data is stored by the world’s biggest search engines (such as Google and Microsoft (Bing)) to calculate the volumes of demand for a particular search term.
Google Trends is a must-have tool for all marketers. Free-to-use, Google Trends allows you to understand the trend in demand for almost any keyword in a particular area. You can view search demand (on a scale of 0-100) at as minute of a level as hourly, or for all terms going back to when records began!
Each data point reflects relative popularity: for example, the demand for ‘soccer scores’ will always be stronger overall than that for ‘bright purple curtains’, but the relative popularity would peak in periods such as a soccer World Cup. And, this level of detail can be drilled down geographically to the City level for the most accurate insights possible.
Try Google Trends now: input any search term you can think of and manipulate the data by tweaking geographies, time scales, and relevant categories. Looking at this data over one year - or multiple years - will give you a visual representation of annual demand trends. Finally, you can also export this data to a spreadsheet format to drill down into the figures.
Our go-to tool for understanding search demand is Google Keyword Planner. For the majority of regions, Google has the highest search engine market share, and therefore the largest data bank available for us to utilize.
Using Google Keyword Planner, a spreadsheet, conditional formatting, and sparklines, we’re able to gain an easy visualization of demand over a typical year; allowing us to forecast and manage budgets accordingly:
Follow the below instructions to create such a spreadsheet for yourself:
A third method of calculating seasonality is using external market factors. Although this is a bit more high-tech, consider the impact of ‘PESTEC’. These factors can influence demand by either reducing it or enhancing it.
PESTEC stands for:
One of the main ways to understand PESTEC factors - although difficult to forecast ahead of time - is by using reputable news sources and industry publications. For example, if your product is a luxury item, demand for it may reduce with the announcement of a recession. Similarly, a long weekend of sunlight and warmth in March may influence sales of products such as sun cream, ice creams, or sun hats. So, with unpredictable short-term factors influencing demand too, it’s important to allow some flexibility in your budget and forecasting plans to allow for sudden unexpected shifts in demand.
With all of this data at your fingertips, you’ll have a toolkit to understand seasonality for your business or brand. Remember to implement this data when budget planning and forecasting to enable you to capitalize on and capture demand effectively throughout the year. Crucially, it’s important to allow some flexibility to capture short-term fluctuations in demand due to unpredictable external market factors.