Gross Rating Point Metrics Will Be Good for Online Advertising

  • by , Featured Contributor, August 11, 2011

GRPs -- gross rating points -- are coming to online advertising, and I think it's a good thing. TV ad measurement giant Nielsen recently announced a new online campaign ratings product for Web ads that will include GRP measurements, broken down by basic demographics, much like what the company offers the TV industry.

The notion of bringing GRPs to Web advertising is not a neutral topic. Many in the online ad industry have openly resisted and fought against the importation of "old" measurement metrics into the online world, fearing that linear media metrics would "understate" what makes online different and better than other media channels. Fellow Spinner Jason Heller wrote a very good column on the topic earlier this week, but I believe this the issue is so important I want to address it in my column today as well.

Here's why GRPs will be good for online ads:

Improve brand-friendliness of online ads. The online world is great when it comes to providing advertisers with direct marketing metrics. We have click rates, mouse-over rates, open rates, cost per action and any number of other direct measures. For brand advertisers and those focused on "mass awareness" we don't have much more to offer than measurements of impressions, unique users and average frequency, and the last two are highly suspect and skewed given growing cookie deletion rates. (Although there are services like Vizu that survey user awareness and attitudes for traditional brand metrics.) Understanding how much of the total online audience is being reached, and how the impressions were distributed by age and sex of users, are metrics brand advertisers know and value. Speaking their language can only help online attract more of their dollars.



More comparability. Whether we like it or not, the majority of all ad spending in the U.S. goes to television. TV ads are measured with GRPs. The more that online media can do to be measured in a comparable way to the rest of the ad budgets, the better it can be valued -- and, by extension, the more likely it will get its full share of spend relative to the audiences it can deliver.

Enables complementary Web and TV programs. Not only will GRPs make online ads more comparable to TV, but it will make it easier for media owners to create, price and sell complementary packages of online and TV media. For example, with GRP metrics, it will be much easier for TV networks to sell bundles of TV and online ads and measure the package in total GRPs delivered.

Puts audience front & center. Online has not necessarily helped itself by leading with the click, click rates, and cost per click. Unfortunately, way too much online advertising is bought, optimized and valued on click-based metrics. Adding metrics like gross rating points and relative demographic reach should help advertisers focus more on the audience reached and a bit less on whether they are members of that elite (and unusual) club, the Natural Born Clickers.

Doesn't mean the Web will lose its unique metrics. Adding GRPs to the online ad measurement doesn't mean we will lose those metrics that are unique to online, and which make it special, such as interactivity, dynamic addressable messaging and impression and user-level direct measures. They are not mutually exclusive to audience metrics like gross rating points and target rating points.

Will this be the final word on new online ad measurements? I certainly don't think so. We still need to address the relative impact of an impression in different media. As we all know, an impression on the Web is as different from an impression on radio as is an impression on TV. The industry has grappled with the notion of defining "engagement" for well over a decade with no success and little progress. I don't expect major advancements here for years, but I do hold hope that we will someday find a way to tackle this issue.

What do you think? Will GRPs be good for online advertising?

9 comments about "Gross Rating Point Metrics Will Be Good for Online Advertising ".
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  1. Joe Kutchera from Latino Link Advisors, August 11, 2011 at 5:52 p.m.

    Great article. By creating consistent metrics across all media, we can make our clients' jobs easier...or, enable marketers to more easily compare media vehicles and reduce confusion about metrics.

  2. Douglas Ferguson from College of Charleston, August 11, 2011 at 8:51 p.m.

    A great way to get rid of that pesky engagement variable.

  3. Sarah Federman from Telmar, August 12, 2011 at 9:18 a.m.

    Yes, we agree at Telmar! We want our clients to be able to create media mixes across ALL media, that requires having at least ONE common metric. Also, as compelling as new metrics like "impact" the end of the day, clients will still want to know "how many" people they reached. Traditional media metrics has a very important role to play, even in the new world of digital.

  4. Dave Morgan from Simulmedia, August 12, 2011 at 11:20 a.m.

    Agreed Sarah. Can't imagine any advertiser that doesn't fundamentally want to know a basic reach metric.

  5. Amy Do from SPARK, August 14, 2011 at 12:32 p.m.

    Excellent article. Many corporations struggle with digital media, yet understand GRPs. Pulling this common metric will help break down a communication barrier and demonstrate the value of digital channels and the importance of integrated marketing.

  6. Brian Gardenhire from Camelot Communications, August 15, 2011 at 10:28 a.m.

    We don't need Nielsen or anyone else to translate impressions into GRPs--it's simple math! However, most interactive specialists don't understand the formulas. I have been showing clients online GRP data for a decade--it's essential for any cross-media delivery analysis. And this type of analysis is required in order to show old-school decision-makers (the ones who can move billions of TV dollars to interactive) how a significant budget share-shift can improve their plans.

  7. Thorsten Rhode from marqueteer, August 15, 2011 at 6:19 p.m.

    At this point, can I just link to a comment I made here on Aug 4, 2009?

  8. Daniel Flamberg from Morgan Rothschild & Company, August 15, 2011 at 11:20 p.m.

    The move to use GRPs (Gross Ratings Points) for measuring social media is a confluence of two corporate agendas rather than a real attempt to give brands a viable/realistic measurement tool.

    Facebook wants a shot at TV budgets and needs a way in. Nielsen needs to remain relevant and competitive in the digital world. But GRPs will add zero actionable insight for Facebook or Newsfeed marketers.

    These dominant players are looking to rig the game in their favor. Facebook totally controls access to the audience. Nielsen controls how things are measured. Both can manipulate the game to their own advantage.

    Listen closely, you can hear the pitch in your head. “We can now measure the relative reach of your postings and compare them with the reach of your TV spots using the same yardstick. Now you can easily plan and but social media and TV together or create the optimal media mix.”

    GRPs are a short hand that media guys use to figure reach and frequency for campaigns and limited time buys. They don’t tell you anything about impact of your message, time spent or exposure to your message or engagement; how users respond, react, re-post, share or comment on content.

    Gross Ratings Points and Total Ratings Points (TRPs) became the default measurement to generate a plan quickly when former broadcast planners and buyers became overnight digital media specialists in the late 1990s. Nielsen has trained a few generations of media planners, media buyers and clients so that this shorthand has become the default standard.

    Most working marketers believe that orthodox reliance on TRPs limits media creativity and obscures competitive media opportunities. But it’s a simple and easy calculation to justify a buy recommendation or to back into a budget number.

    Facebook totally controls reach, especially for marketers, with the EdgeRank algorithm. Research indicating that brand access to fan’s walls is less than 10 percent of posts threatens to kill the golden goose. If brands can’t get better access to the Facebook users who have friended us, there’s no way we’re going to pay the ad rates Zuckerberg fantasizes about. According to the Wall Street Journal, Facebook is testing different filters and has hinted that they might even create an unfiltered newsfeed.

    Changing the filter and granting brands greater access will not only improve advertiser relations, but it will multiply the data Facebook can capture and re-sell to eager marketers. It might also provoke a considerable user backlash if endless ads appear in newsfeeds.

    More importantly GRPs don’t measure the stuff we need to know. We need to know what people do on Facebook, what they click or don’t, what content draws them in or keeps them on our page and how much they share what they find with their friends. GRPs offer no answers to these questions.

  9. Dave Morgan from Simulmedia, August 17, 2011 at 6:21 a.m.

    Ken, I don't think that mixing "big server" data and panel data dilutes the value of the direct measurements online. Server data on its own can be very inconsistent - cookie deletion alone makes unique visitor counts inflated. However, triangulating from the two gets much closer to the truth, particularly now that panels are being enhanced with data from sources like Facebook, which are massive, and a far cry from the small sample of hand-raisers that have dominated our media measurements in the past.

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