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.
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?