After the frantic rush of Black Friday, the build-up to Christmas, and the Boxing Day sales leading into January, we enter the month most dreaded by ecommerce businesses—February. Traditionally, February is marked by slower sales and reduced budgets.

February has long been a dreaded month for advertisers, as consumers cut back on spending after the holiday season. Many are still paying off credit card bills well into February. January sales have already wound down, and retailers are starting to stock up on new products. In fashion, the autumn/winter season is over, and spring/summer collections are launching. However, with the weather still wintry and new products priced at full price, demand remains low—understandably so.

Historically, February has been the lowest revenue-generating month of the year. This is partly due to the shorter month, but it has also ranked last in revenue in five of the last six years, only finishing second-to-last in 2020 when the pandemic began to take off. Moreover, February has seen the lowest spend over the past four years, with 2019 being the fifth-lowest.

However, it seems that advertisers may be cutting their budgets a bit too much. February's Return on Ad Spend (ROAS) has actually been stronger than in many other months. In 2020, while it was the second-lowest performing month, the pandemic eventually sparked a retail boom. In 2024, February had the 5th highest ROAS of the year. In 2021, it ranked 3rd highest despite the lowest spend—nearly 7% lower than other months. So while February is traditionally slower, there are still opportunities to increase or shift budgets for better results.

In 2023, February’s ROAS actually outperformed November, which is typically the highest revenue-generating month. This could suggest that retailers may have held back too much of their budget, missing an opportunity to capitalize on strong performance earlier in the year. As we discussed in our Q4 Analysis Blog, Q4 performance was strong, but it could have been even better with a more strategic approach to budget allocation.

Since February is a shorter month, it’s only fair to analyze this on a spend-per-day and revenue-per-day basis. While spending typically rises to 11 for most years, revenue remains the lowest in all but two of the past six years.

In 2024, February spent 28% less per day than May, despite having a stronger ROAS of 693% compared to May's 657%. Although May outperformed February ever so slightly the previous year, many retailers may have established rigid budget structures for the year and were not reactive enough in February.

Another reason to spend more in February is the lower cost per click (CPC). As more retailers scale back their budgets, CPCs tend to drop. In 2024, CPCs were 30% cheaper than in December and 10% cheaper than in January. In both 2023 and 2024, there was a noticeable drop in spend starting from the 13th of February for the remainder of the month. CPCs dropped by 6% in 2023 and 9% in 2024 during the first two weeks of February compared to the last two.

In 2024, the week commencing 19th February was the second most profitable of the year, with an 8% higher ROAS than the yearly average, only behind the following week, 26th February, which ran into March and had a 9% higher ROAS than the average. The week of 19th February was the lowest spending week of the entire year in 2024, with only the week of Christmas marginally ahead.

Sector Performance in February

If we dive deeper into what sectors performed well in February, the biggest sector we analysed was the fashion industry, examining over 70 accounts. From a Google Product Category level, Clothing and Accessories performed poorly over the last three years, having the worst ROAS in February compared to other months in 2022 and 2023. However, there was a rebound in 2024, where February ranked 8th, with November taking the most profitable month. This can likely be attributed to the change in seasons, as August has also been a poor performer in both 2022 and 2024.

Although some may expect Jewellery to pick up in February, it still performed poorly, finishing last in 2022 and 2023, and only behind the summer months in 2024. However, there was a boom in September and through Q4.

Electronics followed a similar trend. An industry that typically booms during Q4, Black Friday, and January sales had its worst month in February in 2022 and 2023, and ranked the 3rd poorest performing month in 2024, behind April and May.

Furniture, however, performed well. It was the most profitable month in 2022, 3rd in 2023, and 5th in 2024. A category that traditionally has a much higher cost per click than most saw CPCs 56% cheaper in February compared to November and 38% cheaper than June.

Although revenue, cost, and ROAS are often the key metrics, CPC in February is also a crucial factor. If you notice your CPC dropping heavily, that could mean your competitors are scaling back as well, presenting a great opportunity to push your products, provided stock levels are strong and ROAS is holding up.

Advertisers will also need to monitor Target ROAS, as it could be limiting spend. Last year, February outperformed January, so it's important to ensure that your campaigns aren’t restricted by a Target ROAS that’s too low. While it's always a good practice to regularly check your Target ROAS to ensure you're fully utilising your budget and staying aligned with your goals, this is especially crucial during this time.