Commentary

Why The GRP Must Die: And Why It Won't

Is it really still true, in the age of digital, that if you blast enough eyeballs with an ad for a fast-food burger, you’ll sell more beef?

 

The answer to that question is a qualified yes, but the size of the asterisk grows bigger by the day. On the one hand, Gross Ratings Points formulas have been the bedrock of advertising for decades. They play a big role in the media mix models advertisers see as crucial for understanding omnichannel performance.

Conversely, the GRP model is breaking, thanks to the Internet and mobile and trends like cord cutting and media fragmentation. Once, advertisers could comfortably rely on the GRP—spend enough to max out reach and frequency and inevitably the needle will move.

Today, however, that spend doesn’t deliver the same bang for the buck. Although we collectively acknowledge this shift, all advertisers can really do is lament that things aren’t what they used to be.

Instead of asking what comes next, advertisers want to know how they can fix the GRP. One response is to extend the GRP to digital. Last summer, Facebook “caved” to advertisers and began selling video based on the GRP. Of course, that approach overlooks the primary attribute of digital media—precise targeting of audiences.

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Where a GRP model encourages the advertiser to maximize reach and frequency of a demographic (adults 25-54), whether the ads are relevant to the audience, digital thrives on targeting specific audiences that behaviorally display an affinity or intent for the brand or product.

The point is to limit the reach to the audience that welcomes your message, thereby lowering the frequency to drive a conversion event. Namely, show fewer ads by making them more relevant.

An equally perplexing response to a broken GRP model is to double down on it. Consider the state of the television industry. Even though there’s widespread concern in the TV business about a ratings decline, that trend is seen as the impetus for advertisers to buy even bigger packages from networks.

Thanks to media consolidation, those networks are well positioned to sell those packages. So why are Facebook, the television industry and advertisers so keen to prop up a model they know is broken?

It takes years for everyone to get the memo, synthesize the meaning, formulate a solution, and embrace a new model. Today, we’re probably somewhere between synthesizing the meaning and formulating a solution.

Many in the advertising ecosystem understand that the GRP needs to die, but there’s little agreement on what comes next. Plus, there is widespread inertia around the idea that the GRP, for all its flaws, will remain.

It’s right to use data to understand the connection between advertising and business outcomes. And there is a loose connection between the reach and frequency of your ad and how many burgers you need to make.

But tying the GRP to ingredients ordered feels about as crude as cutting a steak with a butter knife. We can be much more precise.

What any brand really wants to know is whether marketing is driving visits, and more importantly, how the brand can increase traffic to its restaurants. Retailers, automotive brands, and airlines each allocate media spend with the ultimate goal of driving a real world event.

Even brands that don’t control their physical sales channels, like consumer packaged goods brands, advertise in order to drive a real-world event. So it only makes sense to draw a connection between a cereal ad campaign and location-specific sales data. What’s changed is that many of the same forces that have disrupted the GRP have made those events more feasible to measure.

Of course, disruption has a funny way of coloring our judgment. It’s easy to see the flaws of a broken model because those flaws have been laid bare like an emperor without clothes. It’s harder to see the virtues of an obsolete model.

What sustains the GRP is that it is a universal metric, and that universality has necessitated the development of an advertising infrastructure that is incredibly valuable. You don’t throw out that value overnight.

Frankly, you don’t even scrap it immediately after you realize it has stopped working well.

Companies hang on because they are invested in the GRP. Inevitably, there will come a tipping point when the cost of a new model will exceed the cost of abandoning the GRP—as an industry, we know this to be true.

The question marketers should be asking themselves is what are they doing to prepare for the moment when the GRP is truly dead?

 

22 comments about "Why The GRP Must Die: And Why It Won't".
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  1. Ed Papazian from Media Dynamics, August 23, 2016 at 9:45 a.m.

    Michael, even if you were able to single out every consumer who is in the market for what you are selling----using "data" of course, not demographic profiling---you would still have to consider how many times you needed to expose said consumers to your ad message for the campaign to be effective and whether certain segments required specialized ads and varying amounts of frequency. In other words you would approach this with an advertising-to-sales ratio in mind and this would set certain limits on the amount you plan to spend on advertising your product. In the end you are right back to using the hopelessly outmoded and "broken" GRP model.

    While a direct marketer  may look at targeting simply as a means to unload a given amount of merchandise via targeted advertising tonnage, a branding advertiser is trying to gain ad and product awareness and make consumers motivated to try a product or, in the case of current customers, to reinforce their brand preference and get them to stock up. No matter what media mix is involved, including digital, thia requires a media plan to have an anticipated audience structure, relative to ad spend. This is why GRPs and reach and frequency factors are not obsolete  as they simply describe in understandable terms how many people are being targeted, and, on average, how often they will have an opportunity to see the advertiser's ads. In many cases, such deliberations go even farther, with breakdowns of various frequency groupings, variations by certain demos----older consumers may need fewer---or more---impressions than younger ones, etc.

    The endless straem of articles claiming that the "GRP model" is broken never cease to amaze me. It's not a model at all, it's merely a mathematical way to describe the dimensions of a media plan's audience delivery----no matter how the target is defined and no matter what medium is involved.

  2. Neil Ascher from The Midas Exchange replied, August 23, 2016 at 3:35 p.m.

    Thank you Ed!

  3. Jack Wakshlag from Media Strategy, Research & Analytics, August 23, 2016 at 1:11 p.m.

    When targeting data becomes reliable and accurate advertisers will be able to target but will still want to reach light buyers until the marginal cost of the ad is less than the value of the sale. We are so so so far from anything like that for any important advertising category you can think of. 

  4. Mark Eberra from ONE BILLION LIVE Inc. replied, August 24, 2016 at 4:25 p.m.

    Michael Hayes wrote: “Is it really still true, in the age of digital, that if you blast enough eyeballs with an ad for a fast-food burger, you’ll sell more beef? The answer to that question is a qualified yes…"


     


     


    With all due respect Michael, I must ask how is that answer “qualified” exactly?


     


    For example, are you indeed saying that if I run an internet Ad for hamburgers using a GRP measurement, I will increase the sales of my hamburgers?


     


    If that is a fact then you must be offering the fast food advertiser a guaranteed number of hamburgers sold as a result of running the ads. And of course those sales must be net new revenue, and not from any other advertising, or current sales process. And if you can indeed deliver on such a guarantee, then you will run the Ads in advance of any payment from the advertiser so they can pay only when the guaranteed sales come in, right? If you can’t meet the above conditions then I respectfully suggest you qualify your answer as something other than “more” sales. 

  5. Mark Eberra from ONE BILLION LIVE Inc. replied, August 24, 2016 at 4:28 p.m.

    Jack Wakshlag wrote:, “We are so so so far from anything like that for any important advertising category you can think of. “

    Actually Jack, we are there right now in 2016 with the GSI™ ( Guaranteed Sales Increase). The GSI™ is a polymathic algorithm for calculating the exact number of sales a business will make from advertising a product or service. It is now possible to guarantee an increase in sales for every product advertised in any media.

  6. Cliff Foyster from Dionysian Media, August 23, 2016 at 2:37 p.m.

    "What any brand really wants to know is whether marketing is driving visits, and more importantly, how the brand can increase traffic to its restaurants."

    Impressions are a key driver in creating the brand, the "GRP is dead" arguement is kind of putting the cart before the horse.

  7. Garrett Donaldson from JKR Advertising & Marketing, August 24, 2016 at 5 p.m.

    "The GSI™ is a polymathic algorithm for calculating the exact number of sales a business will make from advertising a product or service."

    I have no idea what a polymathic algorithm , and I'm not so sure the writer does. As from the Concise Oxford Dictionary definition of polymath:


    polymath
    · n. a person of wide-ranging knowledge or learning.
    – DERIVATIVES polymathic adj. polymathy
    – ORIGIN C17: from Gk polumathUs ‘having learned much’.

    So in all fairness, what the heck is a polymathic algorithm?

  8. Ed Papazian from Media Dynamics Inc, August 24, 2016 at 6:49 p.m.

    To use any algorithm you need precise and relevant data---which is usually just not available to make forcasts of this sort. There are too many variables---many interacting over time-----to make it work.

  9. Mark Eberra from ONE BILLION LIVE Inc. replied, August 24, 2016 at 8:23 p.m.

    Ed, wrote "To use any algorithm you need precise and relevant data---which is usually just not available to make forcasts of this sort. "

    Ed, our Algorithm is not "forecasting", so basically what you are saying does not apply to the GSI™. Most important, it has been done before, and it's certified so we know it works.

  10. Mark Eberra from ONE BILLION LIVE Inc., August 24, 2016 at 7:48 p.m.

    Garrett, I wrote the comment you are referring to and I am the inventor of the GSI™ Algorithm. So you can be assured that I do know what it is. While the specific technological application remains a closely held trade secret there is a video on my official web site at http://www.markeberra.com/gsi.html that explains the conceptual and mathematical foundation on which the GSI™ Algorithm operates . The GSI™ is "polymathic" becaused it integrates a wide range of scientific disciplines into a self learning system.

  11. Mark Eberra from ONE BILLION LIVE Inc. replied, August 24, 2016 at 8:26 p.m.

    CORRECTION: The GSI™ is "polymathic" because it integrates a wide range of scientific disciplines into a self learning system.

  12. Jack Wakshlag from Media Strategy, Research & Analytics replied, August 25, 2016 at 1:35 p.m.

    Just what we need, another "black box" proprietary solution that doesn't forecast.

  13. James Unitas from Stern Advertising, August 25, 2016 at 11:21 a.m.

    Mark, for those advocating we hold tight to the GRP model, and Ed, we've gone back and forth on this a bit in a previous comment section, will see this world and industry fly right by them. The only ones who will still want to reach a broad "Branding" type awareness are the Media planners and marketers who don't understand the evolution taking place. You cannot tell me that ANY advertiser will want to waste millions of dollars in an attempt to "Brand" a product, if they are given clear insight to how they could potentially target the exact people that are going to purchase that product and increase theiir top line sales. Branding, in this age, is an agency construct that attempts to find potential customers because the agency lacks leadership and foresight to bring their client into the modern media landscape. Our goal is, and only ever will be, to increase the revenue stream of our clients as efficiently and effectively as possible. "Branding" is as antequated as the GRP itself. The only branding you need these days are 100 million tweets, likes and shares!

  14. Ed Papazian from Media Dynamics Inc, August 25, 2016 at 12:05 p.m.

    James, you are absolutely right. If there was a way to define exactly who in the entire population was likely to buy the advertiser's sales pitch and buy the product on an individual-specific basis and send only those people ads, most advertisers would jump at the chance to do so----providing this could be done mostly via linear TV plus some digital and, perhaps, print media, support. Unfortunately no such capability exists, not only for defining exactly who will be receptive to each advertiser's unique brand positioning strategy but also for sending only  said individuals the brand's commercials, thereby eliminating "waste".  We hear this claim over and over from digital media enthusiasts but, in reality, even if one used digital media exclusively, all you will really get is the ability to target some product users, but not all of them and not necessarily those who will be receptive to your brand's claims. For example one brand may pitch itself to the price conscious segment of the market, another may target those who are fashion conscious or status conscious or into ecology or have health concerns, etc. So in addition to knowing whether they use the product you must find a way to evaluate their mindsets. That's why most branding advertisers feel obliged to cast a wider net than you are advocating---a much wider net. The limitations of overly narrow targeting and the payout in terms of ROI---as the folks at P&G will tell you----- lead you to go for broader reach and, yes, you must accept a cerftain amount of "waste".

  15. Mark Eberra from ONE BILLION LIVE Inc. replied, August 25, 2016 at 1:57 p.m.

    Ed, the fallacy in your argument is assuming that the path you describe is the only possible path to reaching the sales goal that we all agree on. However, the GSI™ is also one such path. James may have or create another. But one thing is for certain, all roads lead to an increase in sales. It just so happens, the new GSI™ road guarantees your arrival!

  16. James Unitas from Stern Advertising, August 25, 2016 at 1:35 p.m.

    The ability to find your exact target exists today. With Analytics and optimization, Programmatic Audience Targeting, Location Based Services and new technology like what this GSI seems to be (and looking at the definition of Polymath embedded above, literally seems to mean an AI Algorithm). We have the technology today and absoutley CAN target only to customers who would be interested in buying our products. The problem is the CYA aspect. You have to be able to cover your ass and explain the effectiveness and likelihood of success to advertisers who are kept in the dark and not prodded by their agencies to move out of the old way of thinking. We have to look at the technology, we have to look at user demand. We cannot keep looking at how we are used to doing things, because new regulations and means to consume content are changing far too fast to sit around and debate if we should still toe the same line we've been toing for generations. When FCC Chairman, Tom Wheeler, puts through his latest "for the people" intiative of allowing 3rd parties to manufacture TV devices that will permit both traditional live TV programming, and OTT on one device, while also allowing those companies to insert their own advertising, this game is going to change, and change faster than we can truly comprehend. What will happen to the beloved and precious GRP then? More importanly, what will happen to those of us who resisted the evoloution of media placement and measurement?

  17. Mark Eberra from ONE BILLION LIVE Inc. replied, August 25, 2016 at 2:36 p.m.

    James, the answer is very clear, those who resist change will be left behind. When given a choice, the board of directors of companies that actually advertise products and services will choose "increased sales” over "brand awareness" every time. This is based on the fact every board member has a fiduciary duty to the share holders to increase profits and share holder value. So those media companies clinging to eyeballs and GRP will soon find themselves out of business.

  18. Jack Wakshlag from Media Strategy, Research & Analytics replied, August 25, 2016 at 3:21 p.m.

    I have no doubt that the math works. But how sure are we that someone is actually who one sources data says they are? And is it person or household based? Compare any two data sources for something as simple as "households with children." What percent of the time do they agree? Surprisingly low concordance between Experian and or any other similar source. It's not what you think you can do. It's whether you actually can do with evidence showing so that marketers need.

  19. Ed Papazian from Media Dynamics Inc, August 25, 2016 at 3:45 p.m.

    Mark, I don't recall advocating any particular "path"  and certainly not that "my way" is the only one. I leave that to you and James. What I maintain is that there is no such thing as a GRP model for branding advertising. GRPs are merely a way of describing the amount of audience tonnage an ad campaign is expecting to get. In like manner, reach is merely another way of describing what digital people call "unique" audiences or users. You can have a TV schedule that generates 1000 target group GRPs and a 70% reach for ten different brands in ten different categories  but you certainly can't expect the same results in ad awareness, message registration , buying intent or actual sales for each campaign. Too many other variables are involved and I seriously doubt that any magic formula or statistical manipulation will always predict the exact result.

  20. Mark Eberra from ONE BILLION LIVE Inc. replied, August 30, 2016 at 3:49 p.m.

    Ed, it appears we are speaking two different languages. Which is understandable since the GSI™ (Guaranteed Sales Increase) is a pioneering invention. No one in the media industry, outside myself, and my colleagues fully understand the language and applications yet. There are no GRPs, tonnage, reach, ad awareness, message registration, or buying intent measured in the GSI™. There is only one outcome with the GSI™ and that is increased sales verified by cold hard cash. Ultimately, any business that advertises wants and needs that increased cashflow. Of this there can be no debate.

  21. Ed Papazian from Media Dynamics Inc, August 25, 2016 at 3:54 p.m.

    Mark, I find your remark about "those who resist change" most illuminating. What it tells me is that for some, this has become almost a religious cause with one side knowing "the truth" while the other side just doesn't "get it" and, therefore is doomed to extinction---like the Dodo. Actually, the side that has accepted  "the truth" doesn't seem to understand what the other side---those branding folks----are really doing nor is it willing to find out and adapt "the truth" so it has relevance for those that it seeks to convert. That, sir, is a recipie for disaster, not for the Dodos but for the advancement of the art as well as the science of advertising. And that's a large part of the problem. There's much more involved in the decision making, creative and ad  executional process than "data" and media buying----much more. Until this is understood, we will have more and more "debates" like this I'm sorry to say.

  22. Ed Papazian from Media Dynamics Inc, August 25, 2016 at 4:08 p.m.

    James, the GRP is neither beloved nor precious. You have set it up as a straw man to knock down because you and others don't understand what such calculations are used for. To think that GRPs describe a time honored but outmoded advertising "model" that must be overthrown before real "progress" can be had is absurd. As for your claimed ability to find your exact audience and target only people who are "in the market" for your brand---and this, I assume, applies to every brand no matter what product or service category is involved, no matter what the brand is claiming in its ads, etc. that's a swell theory but I seriously doubt that you can deliver what you claim. You may be able to use "data" to identify some product/service users for some categories but most sensible advertisers will not be satisfied with some sales----they want to maximize sales results whenever possible. Regarding the ability to deliver targeted ads directly to those "in the market" for every product and service---and that's really what you and Mark seem to be claiming--- even digital media, with all of its reach and ad effectiveness issues, can't do that. It can get to some people who might be interested in buying, but it will miss many. And this person by person targeting capability, for the most part simply isn't there for TV, radio and print media. Sorry.

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