“Can you go down to the store and get us a box of GRPs?” If you work anywhere in media, you’ve undoubtedly heard this question. For decades it’s been a harmless joke delivered to eager new employees by senior media executives.
These days, GRPs are disappearing and that joke has lost its punchline. There was a lot of press coverage this past week around the continuing decline of Nielsen TV ratings, specifically in 2Q, 2017. But the TV audience is still massive when compared to other mediums, and focusing on the reduced number of viewers, masks the real challenge facing marketers and their ad agencies. The real issue is that finding customers while they’re watching TV has become harder than ever before. Audience fragmentation has made it much more difficult for GRPs to deliver target customers at scale—and as anyone in our industry knows, when the supply of GRPs start going down, commercial pricing goes straight up.
In a world of fewer GRPs and higher costs, that means finding ways to make every advertising dollar work harder, and it begins with understanding that agencies and marketers can’t continue to purchase TV advertising solely on the basis of age/gender demographics.
Thriving in this type of environment requires that marketers, ad agencies and TV networks do the unthinkable: acknowledge the possibility that a continued drop in GRPs will take place and make a plan to embrace the fragmentation. In a world of fewer GRPs and higher costs, that means finding ways to make every advertising dollar work harder, and it begins with understanding that agencies and marketers can’t continue to purchase TV advertising solely on the basis of age/gender demographics. The reason why this industry norm no longer works has everything to do with the explosion in the consumer’s choice on what content they watch, where they watch, and how they watch. Viewers are watching a wider variety of networks and shows than ever before, and today, a marketer’s audience is likely to be found across 60+ ad-supported networks. Reaching a majority of them may require buying thousands of commercial placements.
Fortunately, the industry has a solution that will enable marketers and agencies to reach these fragmented audiences in a way that’s smarter and more efficient. For example, Simulmedia’s VAMOS platform makes it possible to import first-party CRM and third party data to build more nuanced, specific customer audiences. It then translates that audience into the GRP currency on which TV is still bought and sold, and creates a media plan designed to reach significantly more of the marketer’s audience. Marketers can evaluate the campaign’s performance based on actual sales data down to the day, network, daypart, and program-level—and use that data not just for measurement, but for optimization of future campaigns.
These new platforms are already available for use within the TV marketplace, and the industry stands to benefit from the same type of data-driven, technological approaches that are applied to digital advertising. The landscape of TV is changing, and as an industry, we need to experiment with ways to reduce waste, because as the GRPs disappear, so will our collective tolerance for inefficiency.
Lastly, we need to have realistic expectations for performance. While marketers who embrace fragmentation are likely to see increases in their sales and marketshare, they should reward the agencies who helped guide them through the process of these new technology platforms and made those gains possible.
The disappearing GRPs and subsequent increase in commercial pricing are an industry-wide issue, and we need to embrace the challenges together. With new technologies and a new mindset, we can use audience-based targeting and activation to turn fragmentation into an ally. In the process, maybe we’ll also develop a new joke for future generations of media executives. The continuing decline of GRPs is certainly no longer a laughing matter.
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