Article

The Case For Q5 + A Playbook For Making It Happen

Advertising Consumer Behavior Ecommerce Economic Analysis

December 11, 2023

With BFCM firmly in the rearview mirror, the Winter holiday season in full swing and the end of 2023 firmly in the extended forecast (yes, really) – this is your last (realistic) opportunity to plan and execute a plan for Q5. With that in mind, I’ve decided to dedicate this issue to Q5 – what it is, why it matters & how you can take advantage of it (even on short notice!). Let’s dive in!

What is Q5

Everyone has a different definition for Q5 – for some, it’s the week between Christmas and New Years Day. For others, it’s a few days before Christmas through mid-January. I don’t love either of those definitions, because I think both obscure the opportunity.

My definition is simple: the Christmas shipping cut-off through the first week(ish) of the New Year. This year, the Christmas shipping cut-off for Priority Express is December 20, and the last day for two-day shipping is December 21 – which places Q5 as the 21 days from 12/21/2023 – 1/10/2023. The reason for the odd timing is simple: this is the period where most brands pull back (or cease) advertising entirely – either because (i) it’s impractical to ship to customers during that time, (ii) their budget for 2023 is depleted, and/or (iii) their Q1 campaigns aren’t approved/launched yet.

The reason I use this definition – and where a substantial portion of the opportunity lies – is because this is the time when the vast majority of consumer brands reduce/pull their spend across digital platforms, resulting in significantly lower CPMs. And while I don’t care about CPMs per se, I do care when:

(a) the decline in CPMs doesn’t come with a corresponding decline in prospective customer purchase intention or capacity

AND

(b) there’s a compelling offer/messaging opportunity that can allow brands to capitalize on it.

AND

That’s Q5 in a nutshell.

The Q5 Opportunity

Let’s take those three statements in order.

Q5 is a relatively unique period, in that it’s one of the rare times brands reduce spend en masse for their own purposes, not in response to declining consumer demand. In this case, the driver of that reduction is logistical: it’s near-impossible to get stuff into the hands of customers by Christmas after the 20th/21st of December AND most people aren’t in the office/working after those days.

Ad markets are (as the name implies) real markets – and as we’ve all learned in Econ101, when demand declines while supply remains constant, prices drop. That’s exactly what happens in Q5.

Even if advertisers in your particular niche continue to invest in ads, the fact that so many other advertisers are reducing/ceasing their spend still results in a CPM reduction. Historically, that wasn’t always true in search, but as Google has pushed an ever-increasing share of advertisers into broad match + PMAX, it is becoming increasingly true there, too.

At the end of the day, we’re all targeting people. The B2B brand targeting senior leaders at small-to-mid-market companies and the high-end fashion brand targeting affluent millennial/Gen-X households are likely targeting many of the same people. B2B buyers don’t stop thinking about their jobs and roles the second they get home; B2C buyers don’t stop thinking about their personal needs/wants/desires the instant they log into work. All of this adds up to the same conclusion: a substantial decline in marketing investment from any portion of the “demand” pie will result in a decline in CPMs for that buyer segment.

Amplifying this is the fact that people don’t spend *less* time on the internet during the holidays – in fact, they often spend *more* time online. Whether that’s out of boredom, a desire to escape, furious research into how to make meaningful change in the coming year (lifestyle, job, etc., or something else entirely (like those holiday gift cards burning a hole in your pocket) is immaterial. The point is that we (as a collective) spend a lot of time online during a period where brands (collectively) spend relatively little.

The second piece of the opportunity is whether that activity is accompanied by intention. If we’re all honest with ourselves, the answer is an emphatic, “Yes!”

For the vast majority of us, Q5 is a time when we take a breath from the Q4 sprint, consider/make our New Year’s resolutions, reflect on what goals we want to set for the year ahead, observe and grapple with things that we may have put off, make plans with our friends and family, identify and address gaps we may have. Sometimes, this is comes in the form of acute needs needs (“I really needed a new winter coat, but didn’t get one”); other times, it’s in the form of intentions/resolutions/preferences (“I wish my closet was more organized” or “this is the last year I deal with Christmas in this kitchen” or “I really need to get my finances in good shape” or “I need to achieve X for my business/job next year.”) Whatever form it takes, Q5 is a a time of reflection, transition and change.

Reflection, transition and change all (typically) are almost always accompanied by purchase intention.

Yes, your buyer profile may shift during this period – the big holiday spender might want to cut back and get more financially healthy (great opportunity for budgeting/fintech tools), while the saver might want to celebrate a successful year by splurging on a luxury item (great opportunity for the luxury D2C brand). But the notion that people aren’t interested, engaged and willing to spend during this period is flat-out wrong.

Approach Q5: The Offer

No matter what you sell/offer, there’s a relevant Q5 angle. I’ve included just a few examples below, but I’m sure (with relatively little imagination) you can find one for your niche, too.

Health/fitness/wellness Brands: the classic is a “New Year, New You” angle. These are focused on being your best self in 2024. Whether that’s getting a gym membership, up-leveling your workout gear, downloading a fitness app, getting a smartwatch to take control of your routines, get healthier with high-quality supplements, whatever.
Financial + Fintech Brands: Q5 should be money-printer time (and I’m honestly shocked so many push off advertising) – 3 of the top-10 most common New Year’s resolutions are related to finances (improve overall financial health, spend less + increase earnings). The angle here is clear and obvious: achieve your financial goals (with our thing/product/service, obviously). There’s an under-utilized angle around getting ahead of your 2023 taxes, too – one that should be used by both tax service providers and platforms.
Cosmetics, Fashion + Clothing Brands: There are a ton here, but my favorites are related to cleaning out your closet, “look your best to feel your best”, “dress for the you that you want to be” – lots of angles here. And if you know your audience/target, you can easily tie these messages into their desires. For instance, if your primary target audience is early-to-mid career professionals, connect your offer to their desire for advancement/career building; if you’re focused on Gen X / Boomers, tie it into updating a wardrobe for the next chapter of their life.
Sleep Brand: Sleep better so you can [insert the actual goal/objective/challenge here] – again, whether that’s get healthier, reduce reliance on caffeine, wake up feeling great/eliminate back pain, whatever.
Home Services Brand: most homeowners become acutely aware of issues with their current home during Q4 – whether that’s a kitchen that just doesn’t work for family events, or a bathroom that’s painfully out-of-date, or drafty windows that make spending time indoors unpleasant. Q5 is a time when home services brands can capitalize on those acute triggers to sell more stuff.
Realtors: Related to home services – sometimes issues with a current home can be fixed; sometimes not. In cases where a homeowner is painfully aware that their current place no longer works (whether too big, too small, too inconvenient, whatever), there’s a fantastic Q5 angle around making a change to get a home that works for you.
Senior Living: This is honestly one of my favorite (and most under-utilized) use cases for Q5 advertising. The reality is that a great many adult children (a primary decision-maker in senior living) are unaware of the true condition/limits of mom & dad. The winter holidays are often the time when families reconnect in-person – and those limitations/health challenges are made painfully clear and obvious, which, in turn, starts a serious conversation about what’s next and how to care for mom & dad. There’s a wonderful angle here for senior living communities to meet those people where they are and start a conversation about transitioning to a community, what that entails, what else is involved (selling a home, etc.), etc.

The list goes on and on – you can easily see how estate planning lawyers (get your wills done), insurance (update your policies), appliance (save money / get appliances that really work for you, etc.), ongoing service providers (spend less time mowing your lawn + more time with your family/kids), etc. could all find a Q5 angle that resonates with their audience’s shifting needs, desires and attitudes.

Capitalizing On The Q5 Opportunity

There are a near-endless number of methods to capitalize on Q5; all of them start with 3-4 foundational activities (outlined below), which then ladder into the actual strategy + tactics:

Do Your Homework: If there’s one thing you should take away from this issue, it’s that Q5 is a time of change, transition and transformation. That means your target audience’s attitudes, needs, desires and pain points likely look different. Conduct audience research (hello, Pollfish or focus groups), along with historical search terms research (go back and pull the most searched terms from Q5 2019-2022). Pay particular attention to interrogative (question-oriented) queries – those are a major goldmine for identifying the challenges/pain points your audience has. Google Trends, SEMRush, Moz, AHRefs, Answer The Public can all help here.
Craft A Compelling Offer/Angle: Once you know what your audience is after, craft a compelling angle + offer that is likely to resonate with them. Running the same thing you always do with a slightly different message isn’t going to cut it. If you want to maximize Q5, you need to have something that breaks the inertia and moves your audience to act.
Build Landing Pages: It’s no secret I’m a huge fan of landing pages. In my view, they are absolutely essential for Q5 – they allow you to isolate traffic from Q5 campaigns, as well as tell a comprehensive, compelling story around your Q5 message – why you, how it works, what’s next, etc.
Create Supporting Content: Landing pages are incredibly important, but they aren’t everything. As I’ve written about before, a robust and diversified traffic mix is an essential component of successful marketing today. To that end, leveraging the query/keyword/topic research from the first bullet to build truly remarkable, uniquely valuable content for your audiences is important. Remember: the needs/desires of your audience are and will change during Q5, so having content that addresses those changes and facilitates task accomplishment is imperative.
Identify Historical Audiences: Audiences have gone from interesting to essential across the digital advertising landscape. That doesn’t change in Q5. Consider doing the following:
- Build Audiences based on your past Q5 visitors/buyers – the reality is that most people don’t follow through on their New Year’s resolutions. Most people intend to change, but don’t. And those people are likely going to spend this Q5 just like they did the last Q5: intending to change.
- Create Lookalikes of your historical Q5 Buyers – I’m incredibly bullish on the power of well-crafted lookalikes to jump-start machine learning and provide brands with a remarkable edge in targeting (in fact, LALs have been some of our best performing targeting methods, outperforming broad and interest stacks by 18% to 34% in Q4). Take advantage of that by creating a lookalike of your historical Q5 leads/buyers.
- Create a Q4 Buyers/Leads List – One of the most common drivers of purchase behavior in Q5 is Q4 action – either returning items purchased, supplementing existing purchases (for instance, loving a pair of leggings and buying another, or a top to go along with those leggings) and following up on tasks (like a kitchen or bath remodel, new windows, a new car, etc.). Segment out the leads/buyers from Q4 and use Q5 as an opportunity to nurture them, using your Q5 angles from above.
- Consider Current Customer LALs – in addition to your Q5 LAL, consider making a lookalike (either in Meta, Demand Gen, your DSP or another platform) of your current customers, excluding those customers. That’ll give you an audience of people who could want your solution, but haven’t purchased it yet. Layer in your Q5 messaging + send them over to that lander.
Identify Budgetary Targets & Inventory/Capacity: Q5 buyers are different from rest-of-year buyers in many important respects; one of the most consequential of those is a difference in customer value. We’ve found that BFCM buyers tend to be discount-focused, with relatively low repeat purchase rates and relatively low lifetime net-present contribution margins; Q5 buyers tend to break that mold. My hypothesis for that is because Q5 is a transitional time, with prospects/customers trying to break old habits + start new ones (vs. trying to get a discount/deal). That, in turn, tends to result in higher AOVs, less reliance on discounts + increased repurchase frequency. From a marketing standpoint, that often means you can adjust your tCPAs up / tROAS down slightly during this period and absolutely print money: the combination of lower CPMs + higher targets = more volume.

The only caveat to this is: make sure you can service the volume. The single-biggest mistake I see in Q5 is brands ignoring their inventory/capacity levels and out-pacing their ability to fulfill orders/service leads. If you’re going to market during Q5, make sure you have visibility into your inventory and capacity ahead of time – along with a plan to throttle down or pivot should you exceed that capacity. There’s nothing worse than selling something you don’t have.

At the end of the day, Q5 is a massive, oft-untapped opportunity for marketers to finish the current year strong + get a running head-start into the next year. The biggest key to success is understanding the audience attitude shift between Q4 (discounts, value, gift-giving) and Q5 (reflection, change, transformation, transition) and addressing it holistically, through messaging, ad copy/imagery, landing pages, supporting content and audiences/targeting.

If you haven’t thought about Q5 yet, there’s still time to do so. And if you’re already knee-deep in Q5 planning/execution, I hope some of the above ideas/tactics will help you take your plans to the next level.

Until next time,

Sam

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