For those novices out there on Direct Media Exchange, let’s talk about frequency capping. We’ve covered this topic a few times before. Frequency capping is a key strategy for maximizing the value of your inventory.

Let’s say someone is looking at your website. The first ad that a user sees on your web page is more valuable than their second. Those ad-views are also called “impressions”: an impression is the moment an ad appears on your web page.

One traditional reason that the value of the impression decreases is due to “ad blindness” — ads become less effective as a person’s surfing session progresses. Ads catch their attention more at first, then effectiveness drops off over time. Thus, the impressions that follow — the second ad-view, the fourth, fifth, etc. — get progressively less valuable. When you have more traffic coming through your site (and users clicking) , the relevance of impression frequency becomes even more apparent.

OK. What if you could dole out only “1st impressions” to all your 3rd party ad networks? It’s like realizing that you don’t need to sell all the seats in the concert hall for the same price: sell the front-row, 2nd and 3rd row seats for more! When we don’t grasp this, we sacrifice ROI.

Frequency capping also allows you to control supply and demand…so your inventory’s value will go up. If you frequency cap, you make more money overall. And you can do all this through Direct Media Exchange.

First, you can actually traffic in non-Direct Media Exchange networks…and have them participate in an auction for your impressions. You do this by setting a ‘placement’ for them in our “Manage” tab. It’s like a cup holder on your web page…where we always pour the most expensive wine for you (the ad from the highest bidder). You choose the “glass” (ad-size, average CPM , frequency cap, etc.). Then, if your 3rd party ad network bids more, they win the auction and we serve their ad. If not, we serve one from our exchange. We’ll always pour the best for you.

So, how should you set frequency caps?

1) Test a little. Set a placement at 4-5 impressions per user. Let it run for a day or so.

2) Watch your 3rd party fill rates. Note how many impressions Direct Media Exchange is sending to your third party networks over a full day.

3) Login to your 3rd party networks and see if they are defaulting. If they default on half of what is sent, bring the frequency cap down (if it was 4 per day, bring it down to 2). If they pay well on every impression and don’t default any, maybe they’ll take more impressions at that high price: thus, try raising the frequency cap from 2 to 4 per day. Just tweak that frequency cap until you’re getting the highest CPM on as many impressions as possible without defaulting.

And why do we want them not to default? This is why: when that 3rd party network defaults, that means that Direct Media Exchange networks didn’t get a change to buy those impressions. If they had the chance, you’d make more money: more competition equals higher prices from your impressions. That simple.

Over time, you’ll see just what works. And your revenue will bloom.

Let’s all raise our glasses to “frequency caps”.

(If you have more questions, check out our FAQs on using the “Manage” tab.)

This entry was posted on Tuesday, September 18th, 2007 at 2:41 pm and is filed under Direct Media Exchange. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.