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In the world of programmatic advertising, controlling costs while maintaining performance is always a challenge. One of the most important levers you can use to manage your campaign costs in DV360 is frequency capping. When done correctly, frequency capping can help reduce your CPM (Cost Per Thousand Impressions) and improve overall campaign efficiency.
In this blog, we will explore what frequency capping is, why it matters, how it influences CPM, and the best practices to use frequency capping effectively in DV360 without hurting performance. We will also look at a practical example to understand how it works in real campaigns.
What is Frequency Capping?
Frequency capping is a setting that allows you to control how many times an ad is shown to the same user within a specific period. For example, if you set a frequency cap of three impressions per user per day, no user will see your ad more than three times in one day.
The main goal of frequency capping is to avoid overserving ads to the same user, which can lead to wasted impressions and higher costs. Seeing an ad too many times can also create ad fatigue, where users start ignoring the ad or even developing a negative impression of the brand.
By using frequency capping strategically, you can reach a wider audience with the same budget and avoid unnecessary spending on repeated impressions.
Why Does Frequency Capping Affect CPM?
CPM, or Cost Per Thousand Impressions, is a measure of how much you pay to show your ad one thousand times. Frequency capping impacts CPM because it affects how efficiently your impressions are distributed across users.
If you do not use frequency capping or if you set it too high, your ads may serve repeatedly to a small group of users. This creates limited reach and can increase competition for the same users, which often results in higher CPM.
On the other hand, a smart frequency cap ensures your ads are shown to more unique users, which usually makes buying inventory more efficient and can lower your CPM over time.
The Balance Between Frequency and Performance
The key challenge with frequency capping is finding the right balance. If your frequency cap is too strict, for example, one impression per user per week, your ad may not have enough impact because most users need multiple exposures before taking action.
If your frequency cap is too high, like twenty impressions per user per day, you risk overspending on the same audience without driving incremental results.
Research suggests that a user often needs to see an ad at least three to five times before remembering the message. This is why frequency capping needs to be planned carefully to ensure your message is seen enough times to drive engagement without causing waste.
How Frequency Capping Works in DV360
DV360 offers frequency capping options at different levels:
You can also set the time frame for the cap, such as per day, per week, or per month. For example, you can set three impressions per user per day or ten impressions per user per week.
DV360 applies the strictest cap when multiple caps are in place. So if your campaign has a cap of five impressions per day and a line item has a cap of three impressions per day, the line item cap will apply.
How to Use Frequency Capping to Reduce CPM
Now that we know what frequency capping is and how it works in DV360, let us focus on how to use it effectively to reduce CPM without hurting performance.
1. Start by Analyzing Historical Data
Before setting your frequency cap, look at your past campaign data. Check how many impressions per user led to conversions or strong engagement. If you see that conversions drop after the fifth impression, that is a signal to limit frequency beyond that point.
DV360 provides reports that show reach and frequency distribution. Use this data to make informed decisions instead of guessing.
2. Apply Frequency Caps at the Right Level
If your campaign is running multiple line items for different audience segments, it is better to apply frequency caps at the insertion order or campaign level. This ensures that the same user does not see different ads from multiple line items too often.
For example, if you have a campaign promoting different product categories, applying a global cap ensures that users see your ads in a balanced way without being bombarded.
3. Use Daily and Weekly Caps Together
A good practice is to combine daily and weekly caps. For example, you can set a frequency cap of three impressions per user per day and ten impressions per user per week.
This prevents both oversaturation in a single day and too many exposures over a longer period. It also helps control CPM by distributing impressions across more users instead of showing the same ad repeatedly to the same person.
4. Test and Optimize Your Caps
There is no universal rule for the perfect frequency cap. What works for one campaign may not work for another. The best way to find the right balance is to test different frequency caps and measure the impact on CPM and performance.
For instance, start with five impressions per day and then test lowering it to four or three impressions. If you see that CPM drops without hurting conversions, you have found an optimal setting.
5. Combine Frequency Capping with Audience Expansion
When you reduce frequency, you may serve fewer impressions overall. To maintain delivery, consider expanding your audience slightly. This way, you maintain scale while keeping CPM low.
You can add affinity audiences or custom segments related to your target audience. This combination of broader reach and controlled frequency often results in better efficiency.
6. Monitor CPM and Reach Regularly
Frequency capping is not a one-time setup. You need to monitor how your CPM changes after applying frequency caps. If CPM drops but your reach also drops significantly, you may need to adjust.
DV360 offers frequency distribution reports that show how many users are seeing your ads and how often. Use these reports weekly to fine-tune your settings.
Example: Using Frequency Capping to Lower CPM
Let us consider an example. A travel brand was running a DV360 campaign to promote holiday packages. They had a budget of ten thousand dollars and noticed their CPM was eight dollars.
On reviewing the campaign, they found that some users were seeing the ad more than twenty times in a week, which was wasting impressions. They decided to apply a frequency cap of three impressions per user per day and ten impressions per user per week.
After implementing these caps, the campaign performance improved:
This example shows that frequency capping can help control costs while improving efficiency when applied strategically.
Common Mistakes to Avoid
While frequency capping is powerful, there are mistakes you should avoid:
Frequency capping is one of the simplest yet most effective tools to optimize programmatic campaigns in DV360. It helps reduce wasted impressions, improve reach, and bring down CPM without compromising performance.
The key is to find the right balance. Do not be too aggressive and do not be too lenient. Use historical data, test different settings, and monitor results closely.
When used correctly, frequency capping can help you get more out of your DV360 budget, reach more people, and improve the efficiency of your campaigns. Lower CPM and better results go hand in hand when you approach frequency capping with a smart strategy.