Commentary

TV GRPs: You've Had Good Run, But It's Time For New Currency

TV has drastically evolved over the past 15 years now that viewers have more choices than ever, with hundreds of channels offered by cable providers, online video, streaming services, on-demand viewing and DVRs — all delivered via connected devices like smart TVs, tablets and smartphones.  

TV advertisers have been buying media the same way for over 50 years, but now they have to make sense of the new landscape.  That means TV advertising measurement needs to catch up to the new landscape, too.

On one hand, TV advertising’s greatest power — the ability to reach mass audiences — has been diminished by fragmented viewing.  But on the other hand, the proliferation of connected devices has turned TV into a two-way medium.  Now viewers can see an ad and be influenced to immediately respond via a digital channel.  

So why are TV advertisers still only using gross rating points (GRPs) and target rating points (TRPs) to measure success based on reach and frequency alone?  They need a new metric or currency that measures business outcomes based on TV advertising’s ability to efficiently drive a response.

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GRP and TRP: A Measure of Delivery, Not Efficiency

GRPs and TRPs are not measures of TV advertising’s efficiency in bringing more brand equity, conversions or revenue. Instead, they’re a measure of its ability to deliver impressions against an audience.  But TV buyers have been using these metrics for decades as proxies because there was no alternative up until now.

The traditional TV buying process forces buyers to lock into deals a year in advance during the upfronts.  As a result, buyers have been using these metrics to gauge their buys’ ability to deliver against an audience.  As long as the network delivers as promised, the advertiser, agency and network are content because they all measure success against the GRP rather than a true measure of efficiency.

Digital buyers look at this process and shake their heads.  They would never accept the idea of locking the majority of their budget into restricted deals a year in advance, or solely measuring success based on how many impressions or clicks delivered.  Instead, they have the freedom to constantly shift budget at a tactical level, and they use efficiency metrics tied to business outcomes, such as ROI or cost per acquisition (CPA) to guide their optimization decisions.

Now that TV buyers have the means to measure the efficiency of their buys, why do so many still rely on outdated metrics like GRPs and TRPs?  Adoption of a new currency or metric is needed.

The Future of TV Measurement is Now

Marketers that embrace the new world of TV advertising and measurement think very differently.  With the advent of programmatic TV, advertisers can now buy inventory on shorter notice, and they can buy based on an efficiency metric.  In this case, efficiency measures the value of every single TV ad that runs, enabling marketers to understand how much revenue, how many conversions, and how much brand engagement each ad drives, and at what cost.

Even though large portions of marketers’ TV buys are still locked in upfront deals, there are ways to make adjustments to improve advertising effectiveness.  For example, TV buyers can work with their networks to shift impressions into the programs, dayparts, days of week, spot lengths and pod position that drive the most efficient CPA.  Or they can make adjustments to the creative rotation for a given network, depending on which creatives perform best.  But in order to make these types of adjustments, marketers must use a new TV measurement methodology, as well as a metric that demonstrates TV efficiency at a tactical level.

16 comments about "TV GRPs: You've Had Good Run, But It's Time For New Currency".
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  1. Ed Papazian from Media Dynamics Inc, August 10, 2016 at 1:06 p.m.

    Anto, GRPs are not now nor have they ever been regarded as metrics for judging the impact of TV ad campaigns. They are nothing more than a way of stating audience exposure tonnage goals. Coupled with reach estimates or tallies, GRPs allow the media planner to determine the approximate extent of the coverage his/her recommended plan will generate for a given amount of ad dollars. No one thinks that these audience structuring metrics equate to ad awareness or motivating power. Indeed TV's reach and frequency projections significantly overstate the extent of commercial exposure---defined as the commercials actually being viewed. We estimate that only 55% of the GRPs in a typical TV plan actually represent commercial viewings. Hence, if a TV plan calls for a monthly reach of around 75% with an average frequency of 4.0---or 280 GRPs in total--- in reality the advertiser is buying 154 commercial viewing GRPs and the schedule's reach is probably 60-65% not 75%.

    As far as "programmatic" buying helping advertisers to be more selective in their TV targeting that is a fine theory but it doesn't work when the sellers bundle their shows, making it more advantageous to accept a package of good, fair and bad shows at an overall lower CPM that the good ones, alone. As of now, there is virtually no movement by the sellers to change this practice or to abandon their upfront auction.

  2. dorothy higgins from Mediabrands WW, August 10, 2016 at 1:13 p.m.

    Let's start with the first basic: a GRP is simply a re-expression of impressions.  Now, are you saying that imperssions have no value as we move into your "efficieny" model world of engagement and action? Those engaged and acted impressions demonstrate that impressions counts remain our only gauge of scale.  And those that were engage/acted are a percentage of all of those potentially exposed. And the assignment of effectiveness or efficiency is based upon some model for attribution.  Which counts impressions and actions by medium or vehicle. Without impressions how do we compare the potential across different media that have different reach capabilities.  Or is reach now no longer relevant either? BTW, Reach is a GRP measure for uniques. Even when we all have chips in our heads and receive telepathic messaging we will still be counted as impressions and converted into GRPs.

  3. Neil Ascher from The Midas Exchange, August 10, 2016 at 1:30 p.m.

    Ed and Dorothy, thank you for adding your comments.  Let me just add that not all advertisers' campaigns are intended to deliver an immediate action.  Building (and maintaining) brand awareness is a very valid objective.  TV has always had a means of evaluation beyond R/F and GRPs -- Direct Response campaigns.  You can drive a Cost per Action and optimize to your hearts delight.  I'm afraid that our colleagues who have only ever worked in digital media have a limited perspective when it comes to a discussion of TV.

  4. James Unitas from Stern Advertising, August 10, 2016 at 1:40 p.m.

    Although I agree that we will forever be using Impressions or a term that means the same in our industry, I think Anto is making a valid point that GRPs will slolwy slip into obscurity as an antiquated metric. As marketers, and in particular Media Buyers, our job has and always will be to cut waste in our marketing efforts. The GRP, by it's very nature, and to your point Ed, is a metric used for broad, encompossing reach with, using your number of 55% of actual viewing leaves 45% waste in every GRP purchased. With increasingly fragmented viewing habits, emerging metrics of new media will undoubtedly merge with traditional media at some point in the not too distant future. A metrics war of sorts is coming and when the dust settles we will be working in idustry that will be hard to equate to what we are doing now. Yes, a GRP is a conversion of Impressions, but it is a conversion of impressions to the universe population, a metric that will no longer be relevant in a world of audience and habitual targeting. Talk to a Digital Buyer about GRPs and they will look at you like you're head is not screwed on quite right. After all, why would you want to encur such waste with a broad reach campaign, when you can target the sole impression that will actually impact your client's ROI? We will and really right now should no longer be concerned with delivering broad reach GRPs being we live in a world that can target our particular customers with such efficiency. The sooner the old guard of Media Buying get this the sooner we can evolve into where we should be already. GRPs had their day, when there were a small handful of Content providers in Broadcast Network TV and Radio with but a few advertisers clamoring for the ear of the consumer. In today's world with a plethora of content providers for both audio and video, and hundreds of thousands of advertisers trying to shout atop one another, the GRP should RIP!

  5. Ed Papazian from Media Dynamics Inc, August 10, 2016 at 3:14 p.m.

    James, we seem to be talking about exactly the same thing when we say a targeted impression and a GRP which is merely another way of describing impressions. The fact that GRP is expressed in percentage points  does not mean that it isn't against exactly the same target as your digital impressions. Where we seem to drift apart is the evident assumption by digital people that rating points---an old TV standby---automatically means untargeted or poorly targeted, while "impressions" as used digitally, automatically means much better targeted. That simply isn't true. The real difference is the underlying distinction between the direct marketing mentality which strives for a response by every individual user per exposure versus the branding advertiser who is far less concerned with the effects of a campaign on a viewer by viewer basis----but, rather, the overall sum effect against the whole of the target group. To do that you have to fashion a plan that attains a certain level of reach and assume a certain degree of exposure, including repeat exposures, to gain the desired impact. Hence reach and frequency and GRPs.

    I am also surprised by your failure to unjderstand my point about commercial exposure, namely the percent of viewer viewings counted as "impressions" who actually watch a given commercial. You described that as "waste" and you are right. But every medium has that kind of "waste" and digital is no exception. What percent of the users whose screens show a video commercial for at least one or two seconds actually watches that digital advertiser's entire 15-second commercial? The answer is probably way below the TV norm. Does that make digital a more "wasteful" medium? Not necessarily.

    You are probably correct that over time the verbiage we use will change, however it is not at all a given that "old fashioned" media buyers will have little recourse but to adopt the digital user by user approach for all clients. In some cases, perhaps, in others that may not be possible or relevant.

  6. dorothy higgins from Mediabrands WW, August 10, 2016 at 4:50 p.m.

    GRPs and Reach are our only terms for aggregating exposures, engagements, actions, impressions, or whatever we choose to measure.  We can turn clicks, downloads, visits, purchases into GRPs.  The continuing lack of understanding of what GRPs are is actually an embarassment.

  7. Rod Ellis from Adams Outdoor Advertising , August 10, 2016 at 4:59 p.m.

    Ed, excellent points. There is as much waste in digital as anywhere else. When 50% of a digital ad delivered for 1 second generates an impression, how can the digital folks get on a soap box about waste. Advertising is a "both and" proposition. A combination of media outlets or a media mix, for you new to advertising digital folks, is what is needed in a media campaign. What is interesting is how little digital advertising proponents actually know about marketing.

  8. dorothy higgins from Mediabrands WW, August 10, 2016 at 5 p.m.

    Neil, I agree 100%.  Short term thinking leads to short term solutions and all short term solutions do not necessarily ladder up to long term large business effects.  The reliance today on short term metrics and sketchy attribution is inimical to long term brand growth and health.

  9. Peter Rosenwald from Consult Partners, August 10, 2016 at 5:13 p.m.

    It is a source of wonder to most of us who grew up in the direct and accountable marketing community that general TV advertisers have never been able to get their minds properly around the simple question: how much bang am I getting for my specific buck?

    Good direct and data-driven marketers know exactly what they can afford to spend for attracting and converting customers and how much they can optimize within each media category and usually down to each medium and insertion and flight.

    GRPs and Reach are all fine but they tend to look down from the macro heights instead of looking up from the individual consumer. It is a lot easier that way but it's delusive.

    I wrote a book, 'Accountable Marketing' which contained a CD with 36 Excel templates so that marketers wouldn't have to build each model themselves. Users tell me that this gives them a micro vision that foicusses their media buys. You can always look upwards from micro to macro with accuracy but looking down from macro to micro means relying on the most dangerous word in marketing. 'average'.

    Almost everything is measurable. It just depends how important you think it is and not incidentally, how much you are willing to be seen to be wrong in some of your decision making.     

  10. James Unitas from Stern Advertising, August 10, 2016 at 5:40 p.m.

    To be clear I am a TV Buyer. And yes, there is certainly waste in the digital space, but in my opinion, it is only due to the fact of what the digital segment of the industry has set up as its measurement tools. I never agreed that an ad shown for 1 or 2 seconds should ever be considered a full impression. There are also scams, bots and a great number of tricks of the trade vendors and content sites can pull on us to fraud us into thinking we got something we never got. With 18-24 year olds now watching a meager 16+ hours of TV in a week and the 12-17 yo population watching even less, The GRP in terms of a percentage of a population is just not relevant. The costs of hitting a % of population will become so increasingly inefficient that we will be forced to move onto a highbred, probably yet to be developed metric. In ten years, if current trends perisist, the bulk of the A18-49 Demo will be watching about 10-12 hours of TV a week. I consider this a conservative number. Anyone trying to find that audience on a broad, GRP basis, will be throwing thimbels of water on a forest fire. There simply will not be the reach so coveted today. 10 years ago we all knew TV was going to decline rapidly over the next 5 years. That never happened. I feel we all fell back on our heels complacent and comfortable with the staying power of traditional TV. Only over the last 5 years 18-24 yo have decreased their TV viewing by 40%. 12-17 by 32% Netflix, Amazon, Showtime, HBO CBS are all offering OTT with more sure to follow. Unless we start including those audineces in a GRP, the math tells us, the GRP is going away.

  11. John Grono from GAP Research, August 10, 2016 at 5:54 p.m.

    Stunning.

    TV sells the 'opportunity' for a brand to advertise during a programme.  That is backed by broad 'currency' audience estimates.   Yet the author is proposing that in 30 seconds brand attributes also be measured and reported.

    Having worked on automotive brands with long purchase cycles the objective of the TV ad is WAY broader than an instant response - Marketing 101 stuff.

    Now let's flip the coin and call out 'last click attribution' and the like as the myopic 'vanity metrics' they really are.   After all under the 'last action' model, the checkout operator would still be the most powerful marketing lever.

  12. Ed Papazian from Media Dynamics Inc, August 10, 2016 at 6:02 p.m.

    Peter, where did you get the idea that TV ad campaigns---invariably branding not direct response----are simply seat-of-the-pants operations and have little or no accountability. That's not true. The difference is that most of these campaigns use different metrics---ad awareness, brand image, brand preference, sales message registration, intent to buy, etc.--- which do correlate with sales results, not on a person by person basis but against the entire target group or product user group.If awareness, etc. doesn't get as high as was planned and as a result, sales lag behind planned expectations the campaign is changed. If a number of campaigns fail to get the job done, heads roll, including the agencies.

    Frankly I'm mystified at the inability of so many digital people to understand what is meant by branding and their assumption that TV advertisers and their agency media planners/buyers are---let's say it----old school idiots. I agree with you that looking only at the big picture can be misleading however, I also feel that going overboard on "granularity" without an overall perspective and long range strategy is --or can be---just as dangerous. Or maybe overkill is the right word.

  13. Ed Papazian from Media Dynamics Inc, August 10, 2016 at 6:15 p.m.

    James, I think thjat your prediction about the decline in TV viewing is based mainly on what is happening to the broiadcast TV networks in primetime, where they are losing 7-8% or their 18-49 GRPs each season thanks in large part to their continued reliance on the old gang of "reliable" program suppliers and, of course, competition from Netflix, etc. However, TV is far bigger than the broadcast networks between 8-11PM nightly. If you take the primetime fare on ABC, CBS and NBC combined, you are talking about only 10% of all TV consumption, not 100%. Toss in the partially programmed Fox and CW networks and the percentage rises somewhat, but still represents a small share of the total.Your average viewer wants more from TV than just primetime entertainment. There's sports, news, talk, cooking, game shows and documentaries, which are simply not available on SVOD to any significant extent, plus off-network fare, movies, etc. where traditional TV competes with SVOD. So don't give up totally on TV as a medium. Primetime on ABC, CBS, NBC, Fox and The CW?---well that may be a different matter.

  14. Fraser Elliott from Opinions expressed herein are solely my own replied, August 11, 2016 at 11:24 p.m.

    Peter, it's even more of a wonder how so many of the digitally enlightened are so, so in the dark about how much accountability have ALWAYS gone into media that don't rely on clicks.  You sound like you just came from a digital conference in about 1997.  You sound...well, I'll leave it at that.

  15. Lisa Beaumont from Adavow replied, August 15, 2016 at 10:40 a.m.

    TNS and ITV developed BUYER RATINGS as a bi-product of the TVSPAN project which were able to relate exposure to purchase response for FMCG brands only the industry is a supertanker when it comes to introducing change .

  16. Anto Chittilappilly from Visual IQ, August 16, 2016 at 10:33 a.m.

    I am glad to see this article has stimulated some debate, and I appreciate all of your perspectives. Whether designed to create brand awareness or generate an immediate action, marketers always have clear business objectives in mind for their TV advertising. While I agree impressions have stimulation value that can be measured by GRPs, this form of measurement simply can’t be used to tie TV advertising directly to business objectives of the marketer. Only advanced measurement approaches like attribution can bridge that gap.

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