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How to Determine Optimal Frequency Caps for Retargeting

How to Determine Optimal Frequency Caps for Retargeting

By   July 22nd, 2015

If you manage retargeting, frequency caps are something you should be familiar with. They’re often neglected and never tested because they’re not straightforward, but not knowing what optimal frequency cap to use can result in poor results. Like any of the other levers within retargeting, frequency caps should be measured and tested to understand the ideal number of times a unique visitor should see your ad – otherwise, you’re wasting a lot of impressions.

The last thing you want to do is cause banner blindness by overexposure, or even worst – irritate or creep people out to the point where it tarnishes your brand. Having a frequency cap in place limits the number of times a visitor sees your ad over a period of time. It’s important to find that sweet spot; otherwise, you risk running a campaign that doesn’t generate enough impressions to keep your brand top of mind.

You’ll find unproven answers and “best practices”, but the reality is there isn’t one number that works for every single advertiser or industry. If it were really that simple, it would be pre-defined for you. The challenge is to figure out how much is too much and what frequency cap you should use. The best frequency cap is the one that works best to drive results for your business.

Let’s walk through how to test and analyze the initial frequency cap for your retargeting campaigns, then how to optimize to determine the best frequency cap.

The Test Method

If split-testing frequency caps were easy to do, there’d be numerous articles explaining how to do it. It’s difficult to truly test it simultaneously, but here’s one way to approach it:

  1. 1. Begin by setting up two retargeting lists that are similar to one
        another, but not overlapping.
  2. 2. Set your desired cookie duration, which should be identical for
        both lists.
  3. 3. Create two campaigns promoting the same assets, one for
        each retargeting list, and set the campaign to rotate the ads to
        serve evenly.
  4. 4. Input your desired frequency caps in the individual campaigns
        to test against, analyze, and continue playing around with the
        different frequency caps.

You could also try testing only one retargeting list, changing the frequency cap week over week over a period of time, and then evaluating the results. However, there are many factors that may affect the results, and it won’t be as clean as the method above.

Performance Results Analysis

Let’s analyze the results of the tests. For this part, you’ll need to know your way around pivot tables and creating simple formulas.

  1. 1. Run and export an ad frequency report for the desired
        timeframe from your retargeting platform.
  2. 2. The data you should have in the report is: Impressions,
        Frequency, Clicks, Spend, and Conversions or Revenue, as
        well as any other important metrics to measure success.
  3. 3. The next step is to create a pivot table that sets Frequency as
        the row label. Sum up the rest of the data points mentioned in
        #2 under the values section of the pivot table.

Pivot_table

  1. 4. If not present in the report, create the following calculated
        fields in the pivot table to calculate: CTR, Conversion Rate,
        and Cost Per Conversion or ROAS (whichever is relevant for
        you). You should have a table that looks like this dummy
        example:

Calculated_fields

There are two things important to monitor: click-through rate and conversion rate. If you click each frequency number and group them one by one, you’ll be able to see where the majority of your conversions fall. It’s clear from this table that the CTR starts to drop after the second cap, but the conversions are highest and most efficient in costs at one to two caps. Based on this example, I would set my frequency cap at two.

Happy retargeting!

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