Q4 ad costs in the US are seasonal in a way that catches out anyone planning from an annual average. From roughly mid-October, every retailer with a budget starts spending it. The auction has a fixed amount of attention to sell and a sharply increased number of bidders, so the price goes up.
Then in the first week of January, the bidders leave and prices collapse. Both halves of that are opportunities, and most accounts are positioned for neither.
The shape of Q4 ad costs
- Early October. Costs begin drifting up. Still the cheapest acquisition you will get before the new year.
- November. Steady climb into the Black Friday window.
- Black Friday through Cyber Monday. Peak competition, peak CPMs, and also peak purchase intent. Expensive and frequently still worth it.
- December. Elevated, with shipping cut-off dates driving urgency, then a sharp drop once delivery can no longer be guaranteed before the holiday.
- Late December into January. Cheapest of the year. Retail budgets are exhausted and B2B has not restarted.
What to do in advance
Build your audiences in October. Retargeting pools and lookalikes built on cheap October traffic are what you spend against in November. Trying to build them at peak CPMs is paying the highest price for the least urgent part of the funnel.
Get creative approved early. Review disapprovals take longer when the queue is full. A rejected ad on the Wednesday before Black Friday is not a problem you can fix in time.
Raise budgets gradually, not on the day. A large budget jump restarts the learning phase, and restarting it on the most expensive weekend of the year is an expensive way to learn that lesson. Step up through the preceding fortnight.
Decide your ceiling before you are emotional. Write down the cost per acquisition above which you stop. In the middle of a peak weekend, with revenue arriving, nobody makes that judgement well.
The money you make in November is mostly decided in October. By the time costs are high, your options are limited to spending or not spending.
The January opportunity
Almost nobody plans for this, which is exactly why it works. The first three weeks of January have the cheapest acquisition costs of the year, and in many categories genuine demand — new year intent, gift card redemption, returns traffic that can be converted into exchanges.
For subscription and service businesses it is frequently the single best acquisition window of the year, and the budget for it should be protected in advance rather than left as whatever survives December.
If you are not a retailer
You still pay the retail peak, because you bid in the same auction for the same attention. A B2B business advertising through November is competing with every ecommerce brand in the country for placement.
The sensible response is usually to reduce spend through the peak and bank it for January, when your buyers are back at their desks and the auction is empty. This is one of the few genuinely free wins in media planning, and it requires nothing except deciding it in September.
Build the plan on paper first
Take your normal monthly budget, apply a realistic cost uplift for November, and see what it does to your projected volume. If the answer is that your targets become unreachable at acceptable efficiency, that is a conversation to have in September, not a surprise to discover in week two of November.
The budget pacing calculator is useful for the within-month version of this, and the PPC forecast calculator for the what-does-this-budget-buy question at a higher cost per click.
Questions people ask
When do Q4 ad costs start rising?
From roughly mid-October, as retailers begin spending committed budgets. The climb is steady through November, sharpest in the Black Friday to Cyber Monday window, and it eases through December before dropping in January.
Should I stop advertising in Q4?
Only if your margin cannot carry the higher cost of reach. Intent rises alongside price, so judge it on cost per sale against your break-even. For many advertisers the quarter is still the most profitable of the year.
How do I prepare?
Build and warm audiences in September and early October while reach is cheap, finalise creative before November, and raise budgets in steps rather than all at once so delivery does not reset at the worst moment.
What about January?
It is the cheapest buying of the year in most US categories, because retail budgets are spent and advertisers go quiet. For non-retail businesses especially, that is the window to buy attention at a discount.
Working with US brands: Performance marketing for US brands