Commentary

In The Beginning, There Were GRPs

by Jason Heller , August 9, 2011

Once upon a time, the media landscape was a simpler place. Large-brand marketers had the ability to predict the impact of a specific level of media weight and develop campaigns around this process as common practice. Actually, this is still common practice today. However, the digital era brought with it new approaches, new forms of advertising, new advocates shouting from the rooftops, and a new set of metrics -- or did it?

To GRP or Not to GRP

Mention online GRPs to a group of marketers or agencies and you'll get reactions ranging from relief to rage. The notion of using the traditional media metric of GRP (technically TRP, and hereafter used interchangeably) has been the source of heated debate, and in the crosshairs of both Nielsen and comScore, for years.

Make no mistake about it - large-brand marketers require marketplace impact at scale, as well as a means to predict and measure proxies of said impact. That's really all marketers and agencies are trying to accomplish here, and at its core, this is conceptually what the GRP/TRP stands for. I think we can all cut each other some slack and agree that this is in fact a good objective.

The argument for using GRPs goes something like this: Advertisers use GRPs to measure traditional media, so why should online be any different? Having an apples-to-apples metric allows advertisers to evaluate all media uniformly and in a more integrated fashion as part of a media mix. GRPs never accounted for the unique attributes of different media before, but that hasn't stopped us from using it effectively. Digital media offers engagement, but engagement rates are often less than 1%, which feels like the CTR all over again. Give us something we can understand and model against.

The argument against GRPs: We shouldn't fit a square peg of new-media dynamics into the round hole of a traditional media-planning model. The GRP doesn't account for the unique attributes of digital media, such as engagement and relevant targeting. "Apples-to-apples" comparisons are rare because online targets can be more psychographically defined, while traditional GRP evaluations only incorporate demographics. Digital provides a level of accountability that can measure the point of diminishing returns of frequency on branding effectiveness, and other useful measures. Why retrofit an old model?

The Real Issue is Media Currency

While the argument itself focuses around the GRP, the real issue actually stems from a difference in media currency, not metrics. While the unit of media currency for both traditional and digital media is called the "impression," the underlying currencies are in fact different. The currency of traditional media is "audience," where on a buy-by-buy basis impressions equal reach. However, digital media impressions are equal to reach x frequency. As a result, there is an overabundance of devalued online ad inventory (hello, ad exchanges). Just think about the value of a dollar if the government just flooded the market with newly minted currency.

As a simple example of these currency differences, if you buy a spot during a TV program that reaches 1 million viewers, you are buying 1 million impressions, and the reach would equal 1 million(or targeted reach a subset thereof). Frequency is a function of additional buys. When you buy 1 million impressions from a particular website, you buy a share of voice, not the total audience. In this instance, your 1 million impressions can yield 1 million uniques (reach) at a frequency of 1, or 50,000 uniques at a frequency of 20. In all R/F scenarios of the same buy, GRPs would remain the same. Frequency capping allows for the control of R/F, but due to the mechanics of buying gross impressions rather than audience, GRP becomes a poor predictor as compared to its application in traditional media.

Let's remember that the GRP/TRP is used in two facets of advertising:

a) predicting the outcome of specific levels of media weight during planning; and

b) confirming ratings after campaigns have run

The latest in online GRP measurement, Nielsen Campaign Ratings for example, focuses on the latter measurement.

As marketers adopt the GRP online,cost per point comparisons are inevitable, which while irrelevant given the qualitative nuances of different ad units and formats, don't make online advertising look very efficient.

Part of a Bigger Picture Problem

Of course, it is generally accepted that a diverse media mix will maximize reach and the impact against a target, but the ideal mix model is not an easy nut to crack. In order to get to a point where we can predict the impact of our digital media investments, we must develop econometric models that tie specific objectives and marketplace impact to the digital media allocations as part of a media mix. Very few marketers have embarked on this complex endeavor - for digital or otherwise. So expect the GRP argument to rage on.

Weigh in with your thoughts on whether or not, or how brand marketers should use GRPs online. Blow up the comments or hit me on twitter @jasonheller.

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3 comments about "In The Beginning, There Were GRPs".

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Nick Drew from Yahoo Canada, August 9, 2011 at 2:14 p.m.
YES! It's been a long time coming, but finally someone has got beyond the 'GRPs good/ bad' debate to the underlying issue that GRPs are expected to/ don't quite answer.
One small issue though - the 'impressions' figure for TV is never actually used. There's no talk of "this ad will appear x number of times" at all (it's immaterial anyway, as it's about people not impressions). And in fact, when you look at it this way, you have to wonder how the metric of impressions ever developed for online, as it's completely pointless...
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Virginia Suhr from Lobo & Petrocine Marketing, August 9, 2011 at 8:43 p.m.

After years of planning and buying all types media, GRPs are really meaningless. Impressions are more accurate and are the way to standardize comparisons between various forms of media. Digital measurement methods are even better. You can measure interaction with your ads, your webpages and actions. Instead of forcing digital into conforming to traditional media, traditional media should think of more ways to measure its interaction with consumers. When was the last time a GRP purchased a product.

Jason Heller from AGILITi, August 10, 2011 at 9:09 a.m.

@Virginia - Note that I advocate not retrofitting the GRP for digital use. However, what the GRP stands for - a predictable means of understanding the marketplace impact (brand growth, attitudes and sales) is important. I think most people lose sight of that. Some marketers have a good command of predicting the general market impact of media spend. Most do not and then the GRP is an island - an ineffective island.

@Nick impressions are indeed used for TV, but ultimately the concept of a currency that means different things to different media is in fact pointless. The impression is a bad unit of currency.