Why Frequency Capping Is Important in CTV

CTV offers a huge opportunity for marketers. The latest estimates from eMarketer show that the United States alone had more than 194 mln CTV users in 2021. In addition, the potential number of households has every chance to increase by 82% by 2023. CTV ads, in their turn, make the tech world go round, and it makes it possible for creative content makers to do what they want. For users, it is a chance to access premium-quality videos without paying by simply watching short ads. Moreover, some of those ads may contain valuable information about the goods and services that might positively impact a consumer’s life.

Still, some gaps exist. For example, CTV users nowadays often get bombarded with heaps of digital advertisements while online. As a result, many of them become numb to the brands associated with those repetitive, irritating commercials.

Perhaps, marketers are just misspending their budget on too many ad impressions and limiting their number is an effective solution. A fine balancing act is required to make advertisements generate revenues for their creators. Each advertiser in the field related to Connected TV should embrace it with open arms and do their best to prevent watchers from being exposed to annoying and boring ads that pop up over and over again. Frequency capping is a technique that can help with this problem as well as assist with retaining viewers.

This post will explain how frequency capping can help withstand various CTV challenges and which issues have to be solved to help marketers reach their full potential.

Frequency Capping: How Does it Works

So, what is frequency in advertising? It stands for how often an advertisement is displayed to a specific watcher in a particular time frame. It is usually expressed as a per-hour figure.

One of the ways to prevent viewers from tiring of content that they see repeatedly is to place limitations on the frequency of your advertisements. It leads to a better user experience because watchers are not distracted by ads all the time, so they do not get irritated or get ready to quit viewing the video at all. By placing limits, advertisers ensure that viewers become more responsive to advertisements of interest.

Thanks to that, marketers can enhance the performance of their campaigns by targeting a larger watcher pool instead of oversaturating the same audience. There is a higher chance of viewers watching a full advertisement if an advertiser does not overexpose them to the same commercial many times over. It helps to avoid such phenomena as ad fatigue and ad blindness. Thus, a consumer is more willing to take some actions following an advertisement.

A formula for success might look this way: limiting the campaign frequency of the same advertisement being shown = raising the number of original ad impressions made. As a result, it leads to an increase in the click-through rate (CTR) and overall revenue.

What Makes Frequency Capping Vital?

A study by Leichtman Research Group showed that 55 percent of US households are using numerous streaming platforms. So, the same consumer can see the same commercials over multiple applications, which is twice as irritating. Thus, the need for frequency capping is obvious and that is just one example. Have a look at more reasons why this technique is essential in CTV.

Enhanced view-through rate

Viewers prefer to avoid all ads if possible as they do not wish to be distracted by anything while watching the video they want to watch. After the initial encounter, they will probably avoid watching the same commercial again if possible. The main reason for this is viewer burnout, which causes ad blindness. Viewer burnout means stress caused by repetitive ads when waiting for the preferred content. Because of that, watchers start consciously or subconsciously ignoring ads. These two factors make view-through rates (VTRs) drop dramatically. Capping can solve this problem as advertisers target wider audiences and obtain more unique watchers. As the number of times a user is shown a particular commercial is reduced, they don’t get bored with this ad, being more willing to watch it.

Unique ad impressions

Reaching out to new audiences allows marketers to obtain a plethora of original impressions. Frequency capping helps when you want to get more viewers and distribute the budget more evenly. After implementing this technique, you may notice ad performance improving.

Boosted experience

Frequency capping allows for a more diverse delivery of ads. It makes it possible to provide your watchers with a balanced experience to grab their attention and make them want to view your ads. A more diverse user experience leads to higher engagement and more purchases.

Addressable geofencing and perfect timing

Addressable geofencing can help to manage excellent timing. Addressable geofencing makes it possible to calibrate specific fields where every consumer will obtain your message after entering a “fence.” When combined with ad frequency restrictions, this approach is twice as effective. Addressable geofencing is a way to deliver ads to a target audience on time without forcing them to watch the same commercials many times thanks to the capping settings.

What Can Be Challenging In Applying Frequency Capping?

Though useful, frequency capping has its own share of problems.

Lack of Inventory

Achieving the necessary scale for CTV campaigns is a challenge. In most cases, marketers have to buy special inventory rights from OTT providers or hardware manufacturers of CTV devices. Such a strategy can slow down advertising campaigns. How does this problem impact frequency capping? Due to high advertising demand, publishers risk having to reassess the amount of inventory they should offer.

Too Much Fragmentation

The variety of hardware currently used by TV viewers is constantly expanding and that is one of the major challenges for both content publishers and advertisers. These two have to control the number of times their ads are shown on many different devices. A multitude of CTV platforms, such as Amazon, Roku, Apple and so on, make it much harder to get steady and predictable results.

Demand for a Universal Identificator

For several years there have been calls for the creation of a universal identifier which would help to define a CTV audience. For example, there exists mobile tools that can be used to identify which viewers watched an ad and how frequently — for this, they use mobile device IDs and cookies. However, there is no analogue for cookies nor other identifiers in CTV. This presents a fair share of the measurement challenges, especially when campaigns run across a great variety of devices.

Multiple Streaming Platforms

Multichannel experiences are one more problem to consider. The latest reports show that 55 percent of households in the United States prefer multiple streaming platforms, which means that viewers tend to switch between various platforms while watching shows. They have a chance of seeing the same commercials on many channels, which may be rather irritating and not good for business. To save your brand image, you may think about implementing the frequency capping technique.

Setting up Frequency Capping: A Run Down

So, frequency capping is about deciding on how often your watchers will view your advertisement within the specified interval of time. Here is what you should determine to set a frequency cap:

  1. Certain components to be capped (i.e., campaign, marketer, or advertisement creative)
  2. The frequency of advertising with which a commercial must be displayed (i.e., twice or ten times)
  3. Cap reset interval (i.e., hourly, daily, weekly, monthly, etc.)

It’s necessary for content publishers and advertisers to discuss all of these details at the negotiation phase, depending on various factors for every particular offer. To better understand how it works, imagine that you and the third party settle on a “2 x 20” capping. This number is interpreted this way: a couple of impressions to be delivered within twenty hours. In other words, some watchers can encounter the same advertising creative twice per single day.

Takeaways

Some of the industry best practices show that three impressions per day is the preferred frequency for a campaign, but testing is still vital. Marketers should both add a cap and monitor an ad’s performance to achieve the best results. Naturally, the frequency capping technique works best at the DSP level, where the cap can work across all SSPs and ad networks used for a particular ad campaign. But even on a smaller scale it helps to avoid ad fatigue and wasteful spending.