Explainer: Web GRP

What it is: Gross ratings points are the percentage of the targeted audience reached by an ad, times the frequency that it is shown during the campaign. It has long been the standard of the TV industry, which uses Nielsen ratings to judge where to display ads and how often. Despite some efforts, the GRP and the reach/frequency method have never translated to the Internet, which is far more fragmented and, theoretically, directly measurable.

How it Works: Predicting the reach of online advertising works very differently than in the broadcast world. For example, a campaign of 5 million impressions on a site with 5 million unique users may reach only a slender percentage of the website’s viewers. When media planners use GRP to predict reach online, they look at the ad frequency distributions on the website, the number of impressions in a given time period, and other variables such as effective reach. Effective reach is the percentage of users reached at a target frequency level or higher. Small websites usually have higher frequency averages,  but larger websites, which are not as quickly saturated as smaller ones, tend to show better  reach rates.
Who is Using it: The difficulty of calculating reach online has slowed the adoption of GRP-like ratings in digital media, especially as a critical component — demographic data — has been hard to access at  a massive scale. Nielsen wants to change this with its partnership with Facebook. Its recent partnership with Facebook would involve advertisers tagging their ads and then cross-referencing who views them with Facebook data. The concept, although bandied about for years, is still in its infancy. Nielsen recently launched its Online Campaign Ratings service with Facebook and tested the concept last year with Proctor & Gamble and Verizon Wireless. Microsoft’s Atlas also offers a GRP and Reach Forecaster product that may be used in concert with demographic data to produce reach forecasts as well as audience snapshots. ComScore also has a GRP product.
Why it Matters: Brands are still only devoting a small but growing percentage of their advertising budgets to online. Part of that hesitance stems from the difficulty advertisers have in knowing they’ve reached the right audience online. Consumers viewing an ad on the Web may be influenced by it later on and make a purchase, but there isn’t a way to quantify the value of those initial brand interactions. Introducing a new method of determining the reach of online advertising is a great idea, but there are plenty of pitfalls in the model.
Assessment: The Web GRP would be a welcome addition to marketers running cross-media campaigns. It couild also help brands, which too often fall back on direct-response measurements like clicks in order to gauge campaign success. There is the risk that in bending to the ways of TV, digital media will give up what makes it unique: direct measurement of ad impressions and actions.
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