Q5 Starts in 7 Days (and Most Brands are Gonna Miss It)

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In 7 days, something weird happens.

All the frantic gift buyers disappear. Ad costs drop off a cliff. And people suddenly have the mental space to actually think about what they want instead of just panic-buying stuff for their relatives.

This is Q5.

Most brands treat it like a recovery period and time to rest after the BFCM bloodbath.

Meanwhile the smart ones are gearing up for what might be the most profitable three weeks of the entire year.

Here's what caught our attention this week:

• Taboola finally put together a report on what creative actually works in January (pro tip: stop using those polished transformation photos)
• Meta's rolling out AI personalization in two days that'll change how your ads get served
• Forbes says returns are down 25% from last year, which creates a massive upsell window nobody's talking about
• CPMs about to crater 11% according to AdRoll data
• Taylor Holiday explained why Q5 is actually better than Black Friday for certain brands

Let's get into it …

Creative Strategy

Your Q5 Creative Should Look Uglier Than Your Q4 Stuff

Taboola just dropped their Q5 creative trends report.

And the main takeaway is basically "make your ads look less professional."

Which sounds counterintuitive until you think about what's actually happening in people's heads come January 1st.

They're not looking for another reminder of how far they have to go. They're looking for permission to start small and not fuck it up immediately.

For health and fitness brands, that means ditching the polished transformation photos. What's gonna work are shaky phone videos, unfiltered progress clips, and "Expectation vs. Reality" posts that feel like someone's actually documenting their messy journey.

"Day 1 …kind of scared" beats "30-day transformation" every single time.

The messaging needs to emphasize simplicity. "Start with ten minutes" or "A routine you won't hate after three days." Interactive stuff like quizzes and filters crush it because they let people mentally try on a new routine before committing.

In the shopping vertical, "New Year, New Aesthetic" video hauls are about to pop off. Not the influencer kind. The relatable closet cleanout where someone's being honest about what didn't work and what they're trying next.

Personal finance brands should run problem/solution videos with a simple format: call out something relatable, present a quick fix, show the immediate reward. "Ever wonder where your money went?" is gonna perform way better than listing features.

One thing Taboola's ad sales team mentioned that I thought was interesting … when you're running on premium publishers like Apple News, you gotta be squeaky clean with your imagery. But that doesn't mean boring. Natural stuff, like someone just holding a GLP-1 pen, outperforms the staged before-and-afters that usually get rejected anyway.

The psychology here isn't complicated.

Q5 audiences don't want aspiration. They want permission.

And you've got about a week to get your creative dialed in.

See more details here

Platform Updates

Meta's Using Your AI Chats to Target Ads Starting Monday

Three days ago.

Meta started using your conversations with Meta AI to personalize the content and ads you see.

This isn't a small change. Over a billion people are already using Meta AI every month. That's a massive new signal pool for their recommendation engine.

Here's how it works: If you ask Meta AI about hiking, they'll learn you're interested in hiking …same way they would if you posted about it or liked a hiking Page. So you might start seeing hiking groups, posts from friends about trails, or ads for boots.

They're being careful with sensitive stuff. Conversations about religion, sexual orientation, politics, health, race, philosophy, or union membership won't be used for ad targeting.

(Which is … probably smart given how that could go sideways.)

For advertisers, this creates a new targeting signal that could actually improve relevance. Someone who just asked Meta AI for hiking recommendations is probably more valuable than someone who liked a hiking photo six months ago.

The downside? You don't have any visibility into which users are being targeted based on AI interactions versus normal behavioral signals. Just another black box layer in Meta's already opaque system.

But if their AI recommendations are as good as they claim, this should theoretically boost ROAS by serving ads to people with clearer, more recent intent.

Users can control what they see through Ads Preferences. And if you haven't added WhatsApp to an Accounts Center, those conversations stay separate.

Whether that means better performance or just higher CPMs … we'll find out soon enough.

Read full details

Market Performance

Returns Down 25% Is Creating a Bigger Opportunity Than You Think

Forbes just reported e-commerce returns of holiday purchases are down 25% compared to last year.

Lower returns sounds good on paper. Less logistical nightmare, better net revenue.

But here's what most brands are missing.

The returns that ARE happening right now through early January, represent a compressed high-intent upsell window that most people are completely ignoring.

Retailers expect about 15.8% of annual sales to get returned in 2025. A big chunk of that is happening right now.

Which means you've got a short window to turn potential losses into conversions.

The best return messaging reframes the whole experience. Not transactional. Helpful.

"Didn't like it? Let's find something you'll actually love."

What makes this moment valuable is these customers already demonstrated purchase intent. They went through the entire buying process once. Converting them again has way less friction than a cold prospect.

Taboola's research says you can take this further with dynamic creative … show suggested pairings or capsule edits based on what they previously viewed. This reframes "clearance" as "intentional selection," which drives higher engagement from people looking for a fresh start.

The other piece here: gift recipients who return items can become lifetime customers if the exchange experience is smooth and the replacement product fits better.

You're not just salvaging a transaction. You're potentially acquiring someone who might never have found your brand otherwise.

Clock's ticking though.

Nearly half of consumers redeem gift cards by Valentine's Day. So you've got about eight weeks to capture both the return-and-exchange crowd and the gift-card-spending wave at the same time.

If your return flow doesn't actively encourage upsells, you're leaving money on the table during one of the highest-intent windows of the year.

And that window is basically open right now.

Read more about it here

Advertising Economics

CPMs Just Spiked 11% Heading Into The Holidays

AdRoll just dropped their Q4 report.

Retargeting CPMs surged 11% year-over-year through November.

Display prospecting climbed 2%.

Even ABM rebounded after tanking 23% back in August.

The spike wasn't random.

Holiday shopping started nearly two months early this year. Brands panicked about economic uncertainty and pulled promotions forward. Shoppers moved early to spread out spending as inflation got worse.

That concentrated ad spend pushed CPMs sharply upward, especially across high-intent retargeting inventory.

But there's another layer making this worse.

Economic polarization.

Higher-income households drove most of the spending while lower-income households pulled back. So advertisers concentrated budgets on smaller, more affluent segments.

Limited premium inventory + everyone fighting over the same wealthy buyers = CPMs through the roof.

AdRoll's data comes from over 20,000 online businesses, so this isn't some niche trend. This is what actually happened across the board from September through November.

Vibhor Kapoor, AdRoll's chief business officer, said it pretty clearly: "Brands can no longer rely on last-minute spend or single-channel strategies."

The game changed.

Early demand. AI reshaping discovery. Volatile consumer behavior.

Looking ahead to 2026, AdRoll's calling out three forces that'll shape how this plays out:

Economic uncertainty requiring nimble budget allocation.

AI agents increasingly mediating product discovery and recommendations.

And the growing need for coordinated cross-functional teams to actually deliver full-funnel performance without burning cash.

What does this mean for RIGHT NOW?

If you're planning Q1 spend, you're walking into a market that just went through an unusually aggressive September-November cycle.

Brands went early. Budgets got concentrated. Premium inventory got expensive.

Whether CPMs stay elevated or drop post-holidays … AdRoll didn't say.

But the data makes it clear that waiting until the last minute and relying on single-channel plays isn't gonna cut it anymore.

See for yourself here

Strategic Insights

Why Some Brands Make More Money in January Than November

Taylor Holiday put out a post explaining why Q5 hits different for certain brands.

Two reasons that create a perfect storm.

First, the psychological shift.

Dean Brennan from Heart & Soil said it: "It's the only time of year people give themselves PROACTIVE PERMISSION to change their identity."

This isn't subtle. Every other time requires a trigger. Something external has to happen. But starting next week, people just … decide to transform. Without needing a catalyst.

It's cultural. Predictable. And it creates a massive opportunity for brands selling anything tied to self-improvement.

Second reason is pure economics.

Ad prices on Meta build all year, peaking over BFCM. But the bottom of that cycle? December 26th. Eight days from now.

When you combine the cheapest inventory of the year with elevated conversion rates from resolution psychology, you get what Holiday calls "the most powerful acquisition moment of the whole year."

This isn't theoretical. Common Thread Collective is actively building spending power models for clients to figure out how much profitable volume is actually available during Q5.

Most brands are doing it wrong. They're either tapped out from BFCM or taking their foot off the gas because they assume the buying season ended.

The brands that get it are preparing to go aggressive. They're not treating Q5 as recovery—they're treating it as the highest-ROI customer acquisition window on the calendar.

For the right verticals, the question isn't whether to spend in Q5.

It's whether you can afford NOT to.

If you're curious about your volume potential during this window, you've got maybe a week before CPMs hit bottom and 2-3 weeks before broader competition returns.

See more here

Final Thoughts

What This Actually Means For You

The pattern here is pretty obvious.

Q5 isn't an afterthought. It's a strategic reset that separates brands who understand psychology from those just following the retail calendar.

And it starts in 8 days.

Taboola's research confirms what performance data has shown forever that consumers in late December aren't looking for perfection. They want permission to start small and tools that make progress feel achievable.

If your creative still looks like polished BFCM hero imagery, you're probably gonna burn money.

Meta's AI update goes live Monday. Over a billion people using Meta AI means those conversations become another targeting signal. Whether that improves ROAS or just gives Meta more ways to jack up CPMs … guess we'll see.

The returns data creates a compressed window RIGHT NOW where intent is already established. Someone returning a gift has way less friction than a cold prospect. If your return experience doesn't push exchanges and upsells, you're missing the obvious play.

And the economics are impossible to ignore.

CPMs dropping 11% while conversion intent potentially increases? That arbitrage only exists a few times per year. For health, wellness, beauty, fitness, personal finance … this might actually be your best acquisition window of the year. Better than BFCM. Better than any other promo period.

The challenge is execution.

Most brands are either burnt out from Q4 or assuming the shopping season ended. Meanwhile smart performance marketers are finalizing Q5 strategies right now.

Window is short. You've got 8 days until it opens, then maybe 2-3 weeks to capture the lowest CPMs before competition returns in late January. And until Valentine's Day to grab the gift card spending wave.

If you're in a vertical where Q5 psychology aligns with your product, this week is when you build your spending power model and figure out how much profitable volume is actually available.

Because the brands crushing it in Q1 won't be the ones taking December off.

They're the ones who figured out Q5 is when you get aggressive.

And Q5 starts in exactly 8 days.