Commentary

What's Your Plan For Q5?

For many advertisers and agency media pros, planning four quarters may seem difficult enough in these volatile times, but some are now planning for a fifth one.

While a fifth "quarter" might sound like an oxymoron, it's actually just a way of thinking -- and planning -- for the liminal space between Christmas and New Year's when some especially advantageous ad buys are available for the taking.

In terms of high-demand social media platforms such as Facebook, Instagram and TikTok, a new new study from Gupta Media shows a dip in CPMs (cost-per-thousands) for anyone with a budget looking to reach post-holiday users.

"Meta and TikTok each define the fifth quarter differently, with different guidance to advertisers," a new study from Gupta Media notes, adding, "Meta defines Q5 as running from Dec. 18 through Jan. 31.

"TikTok’s scope was more limited: In 2022, it offered Q5 incentives between Dec. 26 and Jan. 8.

"So what’s actually happening? Is this just a marketing gimmick to help move excess ad inventory, or is there value to be had?"

Whatever the rationale, Gupta's analysis indicates there is indeed good advertising values to be had.

Looking at Meta’s CPMs from the past two years, it becomes clear that the notable drop in price takes place in Week 51.

The most expensive week of the company’s year took place on Black Friday (Week 47), with an average CPM of $9.75 that stayed high through the following three weeks. Then, on December 18, ad prices fell to $7.06. 

The same thing seemed to happen in 2021 as well. CPMs in Week 51, Gupta shows were about 20% cheaper than the previous holiday weeks. 

Gupta’s Q5 end-date -- Jan.  8 -- is based on trends occurring on TikTok, which differ from Instagram and Facebook.

Black Friday, in particular, isn't the biggest day of the year on TikTok like it is on Meta, but a starting point for increased CPM rates, which don’t dip until the first week of the new year. 

When deciding to invest in Q5 via Meta or TikTok, it’s important to keep in mind that despite a dip in price, CPMs may still be more expensive than other non-holiday weeks.

“Specifically, CPMs in Week 51 are 8% higher than the Q1-Q3 average, and less than 1% cheaper than the average for Q4,” the Gupta notes.

However, it’s also worth noting that conversion rates often rise with ad costs. So, paying more per ad to reach users in Q5 could deliver more conversions. 

“Let’s say the conversion rate remains steady from December 15 through the end of January. In that situation, ad spend is less efficient in the 10 days leading up to Christmas –– because it could instead be reserved for early January, when the cost of media buying drops drastically,” the report states. 

Overall, when it comes to Meta and TikTok, brands may benefit with small-scale investments in Q5 by allocating a percentage of their typical holiday spend to the time frame Gupta’s study supports. From there, they will be able to test out how conversion rates acquiesce with the lower but still-heightened price of post-holiday advertising. 

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