Programmatic Media Buying 101: Why Digital Media Buyers Use Frequency Capping?

Programmatic Media Buying 101: Why Digital Media Buyers Use Frequency Capping?

Frequency capping has been used by digital marketers for campaigns since the late 1990s. It’s a technique that marketers can use together with targeting for digital advertising campaigns that allows advertisers to limit the number of times an ad appears for each user.

 

How is frequency capping beneficial?

The objective is reducing the number of times an ad is shown helps reduce “banner burnout” for a campaign. Frequency capping helps advertisers save money by not wasting spend on pointless impressions i.e., the tenth impression in the same day for a user who is never going to convert. It helps advertisers to gain a much higher expected conversion rate. The more novel and relevant the ads are, the more likely they can keep an audience’s attention.

Advertisers can set a maximum bid on total impressions and set a frequency cap to limit the number of times an ad is served to each unique user. They can set this cap by minutes, hours, or days and even by the lifetime of the campaign.

 

What can be done with frequency capping?

programmatic buying frequency capping

In addition to monitoring a frequency cap, there are also campaign goals that can be assessed through their metrics. For direct-response campaigns, success is measured by click-throughs. So in this case, frequency capping was used to reduce banner burnout and increase response to the campaign.

 

Frequency capping can also impact how advertisers compete for programmatic advertising impressions and play a role in determining how much they bid. Advertisers with the highest bid will always have their ads served first – that means that the second highest bidder’s ad will only get served once the user has seen the highest bidder’s ad. Therefore, the lowest bid prices will be served last, or not at all.

 

Once the highest bidder’s ad has been served to the to the limit of their frequency cap, lower bid ads are served. This means that users seeing the lower bid ads may have been on the site for longer and are typically in a deeper session or are more engrossed in the site.

 

Finally, high bid prices also yield higher impressions volume. The more page views per user a site gets, the more room there will be for multiple advertisers buying the same inventory. Because the highest bid ad is served first, it’s most likely to get the most of its desired number of impressions.

 

Summary

Frequency capping as a programmatic tactic serves a variety of applications which help to set an industry standard and push advertisers to get the most from their ad impressions.

  • Frequency capping reduces “banner burnout” for each campaign, & helps advertisers save money by not wasting spend on pointless impressions.
  • Cookies are used to determine how many times to serve a banner to each unique user.
  • Frequency capping plays an important role in the way that programmatic ads are served – and impacts the overall spend and ROI of a campaign.

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