ON GROSS RATING POINTS
16 April 2021|Advertising, Audience, Frequency, Reach
In the land of tech stack storytelling the tale of the emperor’s new clothes is alive and kicking. Bandwagons are dangerous things, the lure of novelty drawing like moths to the flame, often without any sign of a band or a wagon. Eventually, belief in the wisdom of the growing crowd can cause collective blindness to reality. Hold this thought.
What do marketers need and expect from vendors of media? In an ideal world, they want to know the effect of money they spend with the vendor on the sales of their products and services. That way they can determine return on investment. However, without a media-owned ‘closed loop’ technology in place (see my last blog post) that can manage and measure context, advertising and sales (ecommerce), claimed effects of advertising on sales are often questioned estimates. There are too many confounding factors at play that are not in the control of the media owner. Marketers cannot expect media vendors to be accountable for sales if they are not also accountable for the product, its pricing, and its distribution (let alone extraneous influences such as competitors and the economy, and pandemics) — all factors that may have a much greater impact on sales than advertising. Which brings me to GRPs.
Media owners can control, and be expected to deliver, gross rating points and their constituent elements of reach and frequency. Advertisers buy audiences from media owners. Audiences are the currency of media buying. At minimum, media owners should provide a credible (independently validated) measure of the audiences they deliver for advertisers. A good long lasting metric that reflects the total audience exposed to advertising is gross rating points. However, this age-old audience measure seems to be waning in popularity, when its relevance for advertisers, particularly in digital channels, is more important than ever as third-party cookies disappear from the web. It is easy to be seduced by measures of clicks and clickstreams, forgetting that advertising works by publicising products and services to audiences, most of whom will not click but will be nudged by the advertising every time they see/hear it. For the great majority of the exposed audience, advertising works by nudging propensity to purchase over the long term. For a small minority there may be a click.
Advertisers should be able to know the reach of their advertising (the number and % of people that had the opportunity to see or hear their ad) and also the frequency of exposure (how many people had the opportunity to see the ad once, twice etc.). These building blocks of GRPs should be available for a wide range of audience definitions — at minimum all individuals and any age/gender demographics — where it is possible to determine a universe (the total number of people in the population) for the audience definition. Non-demographic audiences, such as people who have particular interests (eg. who like fishing), are harder to measure accurately and credibly (particularly their universes) which is why contextual advertising is a good way to reach them (most people who read editorial about fishing are interested in fishing). The end of third party cookies is already causing a resurgence of contextual advertising.
GRPs combine reach and frequency (by simple formula) to provide a universal audience measure and media buying currency that can be used for all advertising, regardless of channel. Delivering GRPs for advertisers requires collective will and action across media owners to measure audience universes, reach, and frequency in a standard and credible way across all channels. Such a clear, simple and effective measure of the audience for advertising is the minimum that marketers should expect from media vendors as third-party cookies come to an end.
