#4: Failing to cap frequency
According to Atlas Solutions, advertisers can decrease their cost per acquisition on direct response campaigns, simply by setting an appropriate frequency cap. The trick is setting the cap at the appropriate level. Direct marketers have always had to play the trade-off game between efficiency and volume, and while a frequency cap of 3x might generate conversions at a lower Cost Per Acquisition, a frequency cap of 5x might result in a much higher volume of conversions at a CPA that still meets the advertiser’s goals.
Without naming names, we all know advertisers who have become infamous for saturating the Internet with ads that we end up seeing over and over.
Audience chafe factor might not be a good enough reason for some advertisers to consider capping frequency. After all, if given the choice between getting the order as the result of being in a prospect's face 24/7 and not getting the order because you weren't top of mind when the prospect went shopping, most direct marketers would choose the former. But most studies of both direct response and branding campaigns uncover a distinct point of diminishing returns. For DR campaigns, there's a sizeable falloff after the third impression, and optimal frequency (with respect to profitability) comes just a few impressions later. For branding campaigns, optimal frequency tends to vary, but most advertisers can quickly discern the point of diminishing returns by glancing quickly at their last Dynamic Logic brand study (or equivalent).
Once that point of diminishing returns is reached for an advertiser, doesn't it make sense that continuing to bash people over the head with an ad is a giant waste of money? Before you answer, consider that frequency-capping offers you the opportunity to stop advertising to the inundated and serve those impressions instead to people who haven't seen your ad yet or who are underexposed to it.
If you pay for your ads on a CPM basis, the only ads you're running that should be exempt from frequency-capping are sponsorships where people expect to see your ad every time in a given location. Everything else should be optimized, regardless of the goal, based on optimal frequency.
