Transparency is needed for a healthier TV ecosystem. Read the Advertiser's Bill of Rights for Transparency in TV.
A gross rating point (GRP) is a standardized measurement of a TV advertisement’s success that tracks how much exposure an ad has received above all else. One GRP is equal to an ad being exposed to 1% of the total possible TV audience, or any household with a television. A GRP reflects the number of exposures an ad gets, and includes frequency as an additional point – 5 GRPs can mean that 5% of the audience viewed the ad once, or 1% of the audience viewed the ad five times. In this way, the GRP system is inclusive of all ad views weighted equally, and can be used to account for both reach and frequency when measuring the effectiveness of a television campaign.
Predicting GRP is an especially important tactic used by networks during the Upfronts in negotiations for selling time slots to advertisers. If a previous season of a popular television show garnered a 30% GRP the previous year, this can serve as the basis for predictions of the second season’s popularity. Networks can leverage this data to sell short ad slots during season two’s run for millions of dollars, pitching to the advertisers that there will be high engagement and therefore a high return on investment. Ultimately, the price of achieving a GRP against the cost of the ad slot purchase is calculated as the cost per reach point (CPRP).
However, the GRP does not guarantee high conversion rates from viewers to customers. It should be held lightly as a predictor of success, as increased reach and frequency tend to be predictors of high return on investment. An advertiser can work with a trusted TV buying platform or demand-side platform (DSP) to facilitate the TV media planning process. The platform can then work with its data providers to gather a report that evaluates the link between GRP and conversion, and then outline next steps for taking your campaign to scale
At Simulmedia, we believe the industry is due for a change to the gross rating point system with a more advanced TV targeting system. For decades, advertisers found that blunt, vague, and undefined targeting based in simple age and sex demographics does not serve the brand or the audiences well. When these broad categories serve as the primary metrics for planning, buying and measuring TV ad campaigns, the picture of who is really getting served an ad and how it serves them comes out opaque. Such a tight strategic audience, based on these variables, means your attribution rate is going to be very low – you’ll waste ad dollars on prospects unlikely to convert. Simulmedia’s data-driven approach and TV+® planning and buying platform can help solve this problem.
The good news is that the future of media measurement is going to change. Nielsen is currently working on implementing a new TV ad panel that considers cross-channel ad platform metrics for buying, planning and measurement, to be implemented in 2022. In addition, other major data providers are taking a more granular cross-channel audience measurement approach.
Our partnerships with data providers such as Nielsen, Experian, Inscape and others offer insights that look beyond the basics and get to the nitty-gritty of user data, so your ad has a more impactful reach to tailored, curated audiences, with more value than the gross rating point system measures.