Frequency Capping
Suzanne Moorey-Denham, managing director, Dynamic Logic Europe, examines recent research from the company, which shows new ways of gaining the most effective impact from online advertising…
Recent research based on Dynamic Logic’s MarketNormsÂŽ database, shows that limiting the number of times an online ad is served to a particular person (or technically their browser cookie), and concentrating that exposure within a 24-hour period rather than showing the same number of ads over a longer period of time, significantly increases Purchase Intent and Brand Favourability.
One of the more important and differentiating features of digital marketing is the ad serving option known as “Frequency Capping”, the restriction on the amount of times a specific person is shown a particular online ad, and is often cited as a way to avoid “banner burnout” – the point where website visitors are being overexposed to an ad and its impact begins to decline.
Frequency capping improves reach, increases the number of people impacted and, importantly, can significantly increase the cost-effectiveness of online media buying. For example, if 1,000,000 impressions are served with a frequency cap of 1, they will be delivered to 1,000,000 people whereas a typical campaign, with an average frequency of 2.5, will reach only 400,000 people with 1,000,000 impressions.
However, research shows that as exposure frequency increases, the reach decreases.
Frequency capping, where the number of times a person sees an ad is capped at a pre-specified amount, is more cost effective than the average campaign in which it is not uncommon for some people to see the same ad 10, 20 or even 50 times.
We have drawn conclusions from real data from 145,000 respondents across 176 online campaigns over the past two years. Suppose a media buyer purchased 1,000,000 impressions to be delivered in one week on a popular site. Typically you would assume that those 1,000,000 ad impressions will be delivered to approximately 400,000 people (an average of 2.5 times per person).
Some site visitors will be delivered the ad once, some twice, etc. If 400,000 people are exposed to a campaign with a typical exposure frequency, we would expect roughly 3% or 12,000 people to become aware of the advertised brand who otherwise would not have been. Regarding Purchase Intent, we would expect an incremental 1.6% or 6,400 to report being likely or very likely to purchase.
Assuming those same 1,000,000 impressions are delivered with a frequency cap of 1 (compared to the above scenario where no caps are in affect). Based on our data, the average impact per person is noticeably less – for Aided Brand Awareness, just 1.8% rather than 2.4% become aware of the brand who otherwise would not have been and 1.3% report becoming likely or very likely to purchase.
When frequency capping is used, the impact per person is less. Those 1,000,000 impressions you purchased will be viewed by 1,000,000 people or 2.5 times as many people as the uncapped campaigns. And, although the yield on a per 100 person basis is lower, the total number of people impacted is greater: for Brand Awareness, 1.8% of 1,000,000 translates to 18,000 people persuaded and for Purchase Intent, 1.3% of 1,000,000 translates to 13,000 people impacted.
Those numbers are 50% and 103% greater for Brand Awareness and Purchase Intent, respectively, than estimates from equivalent un-capped campaigns. So, frequency capping with a cap of 1 is more cost-effective than a typical campaign with an average frequency of 2.5.
We now know that frequency capping improves reach, increases the number of people impacted and also the cost-effectiveness of an online media buy, so you’d expect all campaigns to be frequency capped. There is a downside. Frequency capping requires more ad inventory, so sites will be crunched for inventory if everyone uses frequency capping and savvy sites will begin charging a premium for capped ad delivery. At the moment though, this is the best way to stretch your media budget further.
With regards to Purchase Intent, we used MarketNorms, which aggregates results from 3,254 live online ad campaigns, and compared the impact of exposure distribution on Purchase Intent, which is usually the most difficult-to-move persuasion metric.
Worth noting is that Purchase Intent scores more than double when advertising is shown three times within a concentrated timeframe (within the course of a single day), instead of over a longer period of time. But, the impact on Purchase Intent is not as strong when the frequency level goes too high (10+ exposure range) within 24 hours. The effect of concentrated ad exposure essentially goes away – dispersed versus concentrated are equally effective at 10+ exposures.
This is important news for marketers and advertisers whose main goal is to drive Purchase Intent or Consideration. Instead of running a full-size campaign that might last for weeks, another approach might be to engage in pulses of concentrated advertising within a short period of time, perhaps using roadblocks. However, frequency should also be capped at no more than 4-9 exposures in a single day per person.
Contributors to this article include Ken Mallon, VP of Ad Effectiveness Research, and Christina Goodman, Director of Global Marketing, both at Dynamic Logic, a Millward Brown company.