Generally called Early Booking, for advance bookings. The principle is simple: the further in advance you book your ticket, the less expensive it will be. This allows airline companies to capitalise on their flights and have visibility of the fill-rates of the flights.
If the flight isn't full enough, the company will shift to a focus on last-minute offers, also called promotions. This is only if the plane isn't full, however.
If a flight is offered and filled regularly over time, Early Booking is an attractive option. This is the case for the most popular airlines (thus sure to be full). A London-New York flight will always be less expensive if it is reserved two months in advance rather than two weeks.
Moreover, flight rates being very competitive, many airline companies changes their rates daily. It is necessary, then, to monitor the offers, compare them and react quickly.
Today, some Internet sites permit the consumer to visualise a graph of flight prices over a span of a year: a valuable tool for making the right choice at the right moment.