This is the second part in a series on The Basics of Online Advertising. I’ll be posting a new entry each week for the next four or five weeks.
What are the Daily and Global Caps?
The Daily Cap is the limit of the number times an ad is shown throughout the day. With branded campaigns these are usually in the 10s or 100s of thousands. When used on a performance campaign it can vary based on the confidence in performance for the given targeting parameters. When the cap is achieved the ad stops serving. The next day the ad starts serving again until it reaches the daily cap once more.
The Global Cap is a bit of a misnomer. It behaves as the limiter for the entire campaigns impressions from beginning to end. Once the global the ad stops serving, period. It doesn’t start up again the next day. In ideal circumstances the global and daily cap are harmonious so that the daily cap was restrictive enough, but not overly restrictive such that the global cap was reached or nearly reached on the end date of the campaign. Mathematically speaking – an ideal daily cap is equal to the global cap divided by the number of days in the campaign.
What happens if a campaign falls behind as a result of the daily cap?
Complications arise when scarce audiences or tight frequency caps reduce the potential exposure of the campaign. A daily or global cap might never be met if the campaign cannot serve to enough unique visitors. Adjustments can be made to alleviate this problem. Increasing the frequency cap or adding new sources of impression inventory can allow the caps to be met. Typically an adjustment will be made after the campaign has started. Resetting the campaign goals and global cap by subtracting what has already been served can simplify the new calculations.
Consider the scenario where a campaign has finished the first month of a three-month run. It has a global cap of 200,000,000 impressions. With a frequency cap of two and a daily cap of 2,300,000 the campaign was reaching the daily cap during the week but fell short on the weekends. As a result, the campaign only served 58,000,000 during the first month. It should have served about 67,000,000. For the remaining two months the campaign must serve 71,000,000 per month to achieve the global cap.
An additional 13,000,000 impressions must be found each month. This can be done by finding new publishers or by increasing the frequency cap on the existing inventory. In more clever systems there may be the option to increase the frequency cap even more during the weekends thereby ensuring that the problem does not recur even after measures have been taken. Alternatively, a higher frequency cap during the week might be in order. It really just depends on the overall performance metric of the campaign might be impacted by each action.
The daily cap could also be used to solve this problem. Increasing the daily cap would allow the campaign to grab more inventory during the week.
How does campaign pacing interact with caps?
Pacing must be mentioned when talking about campaign caps. In online advertising pacing is a mechanism that determines the volume of ads delivered in discrete time periods during the day or throughout the campaign. A daily cap really is just a blunt instrument to facilitate day-to-day pacing. There are several different types of pacing algorithms. Most of them are used to regulate delivery of a campaign during the day in adherence to the daily cap or, in the absence of a daily cap, the global cap divided by the number of days in the campaign.
Pacing algorithms are usually designed to be responsive to the caps of a campaign. Caps are typically the primary input. Secondary inputs might be the volume of traffic on previous days or weeks, the percentage of impressions made up of the targeted audience, and a variety of other derived numbers or explicit settings. The goal, however, is to smooth out the delivery of the campaign while adhering to the cap.
A good pacing algorithm is hard to find. Many fall short of making delivery totally smooth, but most do manage to spread impressions across the hours of the day while keeping a mindful watch on the daily and global caps.
[SlideDeck id=’97’ width=’100%’ height=’250px’]