What is Q5?
Q5 is a special time between the end of December and the beginning of the New Year that can illuminate trends, enabling marketers to get a head start on their Q1 planning. Code3 data has historically shown that CPAs begin dropping steadily from December 18th through the end of January. That said, within the week of Q5 specifically, data shows that brands can see as steep as 20% drops in CPA when compared to Q1 and Q4 averages.
In Q5 (December 24 '20 - January 1 '21), here’s what we saw across Facebook, Instagram and Pinterest:
- Facebook / Instagram → 14% lower CPMs on average in Q5 2020 compared to the rest of Q4
- Pinterest → 51% lower CPMs for the eCommerce vertical on average in Q5 2020 compared to the rest of Q4
Characteristics of Q5 Through January
A Less Crowded Market
Less competition translates to lower CPMs and CPAs for brands who continued paid media support during Q5. This was a good time for both direct response and awareness-focused brands, allowing the former to drive the desired action for a lower cost, while the latter increased average frequencies to drive higher recall for less media investment.
Higher Purchase Intent
In Q5 the gifting holidays have settled, and many people are left with an abundance of cash and gift cards ready to spend. The lingering consumer behavior of holiday historically continues to drive high purchase intent through the entire month of January.
Longer Time Spent on Platforms
Perhaps due to the abundance of free time during this period, users typically spend longer periods of time active on platforms during the holiday season as a whole. Users are engaged and primed for the right message. Additionally, Christmas Day in the United States is the single greatest day
for new smartphone activations, so large amounts of new mobile and app users are activated during this period as well.
Brands should take time to identify key learnings from the 2020 holiday time period that can later become the basis of their 2021 strategy. What opportunities did you miss out on? Which audiences, messages and moments were effective? Which ones can you scale further?
Do you want to make sure that your brand's strategies take advantage of all opportunities? Get in touch with us today to see how we can help you execute timely best-in-class strategies.