The notion of universal frequency capping in RTB has long been touted as a major USP. You could argue that it was one of the major catalysts behind the move to consolidated platform-based buying. But has universal frequency capping really been the game changer in the recent seismic shifts in the media buying eco-system?

Let's provide some context here: when DSPs first arrived on the scene and slowly began disrupting the entire ecosystem of media buying (largely for the better), the ability to universally frequency cap was heralded as a huge opportunity for advertisers to save significant costs, reduce duplication across different networks and enable advertisers to have the ability to tightly manage their message across disparate inventory sources, with the intention of improving user experience.

Unfortunately it hasn't panned out the way it was supposed to - largely because the initial use case and adoption of DSPs was (and still is to some extent) heavily skewed towards retargeting. While a DSP enabled buyers to manage frequency, it was rarely a focal point for optimisation strategies. Why? Because ROI was and is still king.

If segmentation is employed on a granular level and highly segmented, in-market users are targeted, then the frequency is typically higher than the campaign average. Recency targeting also becomes incredibly important. These small sub segments of users (such as basket abandoners) see ads more frequently than homepage abandoners for instance, and invariably they will also see them in a much smaller time frame. But if they convert at 10X the rate of less in-market consumers, then the focus on maintaining a great ‘user experience’ is somewhat reduced.

And here's the rub

The way most campaigns are optimised within a DSP is still line item based, a campaign structure having endless rows of line items is still a common practice. And each of these line items have their own frequency rules.

Is it really a problem?

Is this really cause for concern? The only instances of consumer stories concerning ‘stalking ads’ is in the case of the specialist retargeters and a likely reason is because the ads are more noticeable with greater impact. Do standard retargeting campaigns have lower frequencies? Or are the ads simply less noticeable? Either way, for the majority of advertisers still employing retargeting with hard ROI goals, the concept of universal frequency capping becomes a lot less critical.

Universal frequency capping still a USP for trading desks

There is no denying that the concept of universal frequency capping was a key selling point to enable trading desks to start consolidating the majority of display investment. It still is. The pitch to advertisers being that if you centralise all buying into one source, you immediately create cost savings.

Is this really the case? While consolidated retargeting campaigns makes sense from a cost perspective (increased demand on small 1st party segments inevitably inflates bid pricing), the concept of all prospecting executed from one source to reduce prospect of duplication does not statistically add up.

If you were to calculate every individual impression available across different ad zones/placements, different domains, different browsers, different days, different times of day, the prospect of two bidders competing on one individual impression with no user data attached to it, is slim.

Centralised management makes more sense than centralised execution

There is a fundamental difference here between strategies around retargeting and prospecting. If a trading desk can smartly execute retargeting and deliver results, consolidation should happen in this area. Advertisers would be well served by the consolidation of any private exchange execution within a trading desk (partly because of trading deal benefits).

But there is a case to be made around prospecting. If a smart publisher trading desk emerges, with unique data and a smart approach to trading, should the advertiser be prevented from accessing this? If a smart trading specialist can truly deliver ROI without the need to retarget, shouldn't the advertiser be given access to this solution? The answer is of course yes, especially if an agency is fulfilling its role of delivering the best performance for its clients. That means looking beyond its own internal resource and partnering with third parties that can deliver even better performance. This is not to suggest we return to a fractured landscape, as these relationships can and should be managed from one platform.

The future role of agency trading desks

Agency trading desks will ultimately manage 100% of all standard display, video, mobile investment, from one platform - unless of course something like transparency issues around margin blows up the entire business model. By having integrated data, analytics et al, ATDs can create a lot of value for the advertiser.

But an important distinction should be made between management and execution. There is no reason the trading desk should not be buying from third party ‘networks’ that have a genuine point of difference - particularly around data and inventory. They would simply traffic to the third party, as a supply source and hand over the ad tags. The third party is then free to execute in a way that delivers improved performance.

The trading desk can still ‘manage’ centrally. They could continue to manage the flighting. They could change the budget settings. They could manage frequency (assuming universal frequency capping ever becomes central to an ROI driven campaign). Whether they should limit the optimisation capabilities of these third parties is another question, but it would still be possible to flow all data into one place. Some concerns will linger about lack of inventory transparency, but surely content verification services will one day solve this (once the technology can view 100% of ads). In this new world, ad networks that provide a point of difference can still flourish and the trading desk still ‘serves’ and manages from one platform.

When should execution be done centrally?

When brand advertisers truly embrace programmatic buying, this is the moment that all media should be managed AND executed from one place. Universal frequency capping and complete visibility into context and environments will be critical to any advertiser running brand led campaigns.

In this instance, we might also see the opportunity for publishers to monetise data directly through transacting it, rather than needing to build a trading desk around it. The reason for creating a trading desk proposition around it - beyond trying to protect direct sales - is because the data, in a direct response driven environment, simply fails to be monetised at costs that publishers believe it is worth. And the reason for this is it can not be optimised to deliver against CPA targets. If one day, programmatic buying is scaled by brand marketers, with a different methodology employed on the measurement side, then the use of rich data from publishers may indeed make commercial sense for both parties.

The importance of universal frequency capping in the short term will continue to be a weak argument – especially if used as one of the key USPs for trading desks. But the ATDs are evolving. And centralisation of media spend with hooks into third party inventory and optimisation will be key to its longevity - and because of this we will continue to see the rise of smart, third party buying services executing campaigns. So long as the efficiencies of managing it centrally can be realised by both agency and advertiser.