- 3 de mayo, 2010

GRPs For Digital Marketers

Josh Chasin
Josh Chasin
Chief Research Officer

As an undergraduate marketing major at NYU, I took a class called Advertising and Media Planning. There was a question on one of the written tests in that class: "What are Gross Rating Points?" I answered, "Reach times average frequency." For some unknown reason, my answer was marked incorrect - an event that apparently still scars me 30 years later, because this is the second time I've written about it here.

Every couple of months, I turn a corner and find myself smack dab in the middle of a debate about the efficacy of the GRP as an online metric. It usually goes like this. On the one side: "Advertisers need GRPs to place digital media in holistic media context." On the other side: "Dude, whatever. GRPs are, like, totally last century. We can't shoehorn the power of the Internet into an old metric."

I'm going to try and get us all past this. GRPs are a necessary, but in no way sufficient, metric for evaluation of online advertising. If you're in a hurry, you can stop reading now. If not...

Gross Rating Points originated in broadcast media. First radio, and then television, had audiences measured at the program level: how many listeners or viewers were in the audience for a specific show? The result was a program rating. On January 19, 1953, for example, for the episode "Lucy Goes to the Hospital," "I Love Lucy" garnered a 72 household rating -- 72% of all TV households in the U.S. were tuned to the program (at least, according to Art Nielsen.)

Advertisers, of course, ran schedules, which were simply collections of spots. Each spot ran in a program, and so could be associated with that program's audience rating. The GRP emerged as a way to express the audience to an aggregate of spots, which is to say a schedule, and its calculation couldn't have been more simple: the sum of the program ratings for all the spots in the schedule. If an advertiser bought 10 spots across 10 different programs, and each program had a 7 rating, then the Gross Rating Points -- the sum of the ratings of the spots in the schedule -- would be 70. If an advertiser had run two spots in that landmark episode of "I Love Lucy," they would have bought 144 GRPs (which would be parsed as a reach of 72, with a frequency of 2.)

By the way, this was the answer my Advertising and Media Planning professor was looking for: "Gross Rating Points are the sum of the ratings associated with all the individual spots in a campaign." There. After 30 years, I've finally nailed it.

When media choices were limited and broadcast advertising was new, no one thought about moving beyond the GRP metric; you simply bought a ton of advertising, and it worked. And if it didn't work, you fired the agency. GRPs were, and are, a measure of tonnage.

Over time, broadcast audience measurement got more granular. In the '60s, household ratings gave way to demographic person ratings. Program ratings were replaced by average quarter hour ratings (how many people were in the audience during the average 15-minute period) and ultimately, for network TV, by average minute ratings. The idea of moving beyond the program rating to the average minute rating was to make the audience estimate approximate as closely as possible the potential reach of an actual commercial: If 20 million people watched a program at some point during the hour it aired, but in an average minute only 15 million were watching, then 15 million was a better estimate of the audience an advertiser could reach with a single commercial.

Now, you digital folks out there, whom I envision clustered around the virtual campfire listening with bated breath to my tales of the olden days, are probably thinking, "Program ratings? Commercials? This just proves that the GRP is totally irrelevant online; we sell impressions, and they are served one at a time, not broadcast."

Good point.

It turns out, though, that because ratings are expressed in terms of the population (a 7 rating against a particular demographic means that 7% of that demographic was reached), Gross Rating Points have properties with respect to the population. And because the population doesn't change across media (there are 300 million people in the U.S. regardless of whether you work in TV, radio, print, or digital), the GRP has become a metric of cross-platform comparison. So here's another fact about GRPs that you should know: 100 GRPs is equivalent to the number of impressions you need in order to reach everyone in the population one time. If you think about it -- and this sort of thing doesn't give you a headache -- that's really pretty obvious, because ratings are percentages against the population, and GRPs are individual ratings summed up.

So if your digital target is women 18-34, and you know you bought 26 million impressions against that target online, then guess what? Since the population is known (about 35 million women 18-34 in the U.S.), you've just bought yourself 74 GRPs of women 18-34. (That's impressions divided by population times 100.)

(Note to Dave Smith: Yes, the total population, not the online population.)

The question of whether GRPs are a relevant metric online is simply the wrong question. As long as you can know how many impressions you bought against a target, and how many people comprise that target, your GRPs are, a priori, known. (I'm taking for granted that you can divide GRPs by the population and multiply the result by 100, but chances are you or someone in your organization has access to Excel.)

GRPs are a known, fundamental, derivable measure of the tonnage of advertising bought, and the metric allows that tonnage to be compared across media (I bought 200 GRPS of TV and 75 GRPs online.)

A better question is, are GRPs a sufficient metric for evaluating digital advertising?

And of course, the answer is no.

Back when advertising choices were limited, the GRP told you most of what you needed to know. But with today's fragmented vehicle audiences, and with the complex processes advertisers deploy in moving prospects through the funnel, the GRP tells you less than ever before. Today we need to know -- and fortunately, have ways to express -- measures like engagement, awareness, purchase intent, branding effect, ROI, and wear-out. Of course most of these metrics were developed and refined during the TV age (think of IRI and How Advertising Works.) But in the digital age, their importance relative to measures of sheer tonnage becomes even more important.

Looking ahead, the advent of social media will undoubtedly introduce new advertising and campaign metrics (including, for example, resonance and virality.)

But as I say, as long as you can know impressions and population, you've got GRPs. So the next time a "Does digital really need the GRP?" debate breaks out, let's nip it in the bud. GRPs are a necessary, but in no way sufficient, metric for describing digital advertising. Next question.