
Predicting Ad Network Frequency Capping To Increase Publisher Revenue

Market Trends Are Expediting a Shift To Performance Advertising

Traditional Role of Frequency In Online Advertising

- Increased reach – frequency capping is an efficient way to increase reach by expanding the number of unique users that see the ad. Rather than using a marketer’s scarce budget to show the same ad to a small number of users over and over again, frequency capping can be used to ensure that a wider audience is exposed to the marketer’s message.
- Increased CTR – frequency is used as one of the key drivers to improve advertising campaign performance. Click Through Rates (CTR) have been shown to drop precipitously after the first exposure and to plateau at four because of "ad blindness", wherein the user becomes so used to seeing the ad that the user essentially becomes blind to that ad.
- Improved conversation rates – similar to CTR, the conversion rates also are highest on the first impression and typically diminish after 4 - 6 impressions.
Decoding The Frequency - eCPM Relationship With Ad Networks

Optimal Impression Allocation Based On Ad Networks Frequency eCPM Curves

Implementing Optimal Frequency-Based Decision Making: Frequency Revenue Optimization

- Frequency eCPM curve predictions – By observing the frequency impression distribution, default impression distribution, and eCPM trends from an ad network on a continuous basis, an overall frequency eCPM curve for each ad network can be predicted.
- Dynamic impressions allocation to ad networks using Frequency eCPM curves – Each impression can then be optimally allocated to the ad network with the highest expected frequency eCPM, maximizing overall revenue.
Benefits To Implementing Frequency Revenue Optimization

- Increased revenue for publishers – by intelligently allocating ad impressions across a mix of ad networks, based on the frequency - eCPM relationship, publishers can generate significantly higher revenue for each ad impression.
- Reduced number of defaults – default rates for ad networks can be reduced significantly by allocating impressions to the best monetization opportunity. This results in reduced ad serving costs for publishers and ad networks as well as a better user experience because of faster web page load times.
- Better user experience – frequency revenue optimization improves the user experience significantly by showing different and more relevant ads to a user during a web session. This is reflected in higher CTR rates on ads.
- Higher quality traffic to ad networks – ad networks win with frequency revenue optimization because the web sites in their network perform better. The reduction in ad blindness and higher click-through rates translate into better performance for advertisers.
Examples of Publishers That Have Used Frequency Revenue Optimization

Conclusion
The major challenge presented to publishers with frequency capped campaigns is allocating inventory to ad networks in a way that will maximize publisher revenue. What makes this a challenge is the lack of transparency from ad networks about pricing, which makes it impossible for publishers to allocate their inventory in the best way possible. As a result, publishers leave substantial money on the table.Originally written by the PubMatic team and first published on June 1st 2009 as "Predicting Ad Network Frequency Capping to Increase Publisher Revenue".
Disclosure: Pubmatic has no commercial or advertising relationships with MasterNewMedia. This white paper has been republished in its integrity for the value that it provides to professional web publishers and online advertisers in general. Specific paragraphs inside this white paper that provided direct reference to Pubmatic and its frequency capping services have been moved out of the main content and are published here below.
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- Up to 35% increase in eCPM
- 50% to 210% increase in CTR (click-through rate)
- 10% to 50% decrease in ad network defaults (ad requests for which the ad network has no ad to show)
Photo credits: Increasing Revenue For Publishers and Ad Networks With Frequency Revenue Optimization - Gabriel Moisa Market Trends Are Expediting A Shift To Performance Advertising - juliengron Traditional Role of Frequency In Online Advertising - Pavel Muron Implementing Optimal Frequency-Based Decision Making: Frequency Revenue Optimization - Bruce Parrott Benefits To Implementing Frequency Revenue Optimization - micrologo Examples of Publishers That Have Used Frequency Revenue Optimization - Cathy Yeulet