What are Gross Rating Points (GRPs) in TV?

Understanding how effectively a campaign reaches a target audience is critical in advertising. This is where Gross Rating Points (GRP) come into play. GRP is a key metric in advertising used to determine an ad campaign's reach and frequency. It's a valuable tool for advertisers to assess the effectiveness of their campaigns. However, while GRP has benefits, it also has drawbacks. 

This article will define GRP, explain why it is essential, and discuss its drawbacks. It will also introduce contextual targeting as an alternative approach that can provide advertisers with more detailed and accurate information to maximise the impact of their campaigns.

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What are gross rating points (GRPs)?

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The Gross Rating Point (GRP) is a popular traditional advertising metric for determining the effectiveness of a marketing campaign. The impressions are calculated as a percentage of the targeted audience multiplied by the frequency of ad exposure to that audience. GRPs are typically used in traditional ad formats where precise measurements are difficult.

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GRP metrics are primarily used in media planning and purchasing. GRPs have been the primary measurement tool for TV advertising purchases since their introduction in the 1950s. Advertisers typically compensate publishers based on the rating points assigned to a specific ad.

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Although GRPs are most commonly used in traditional advertising campaigns, they are critical for digital and mobile marketers when comparing and coordinating linear TV and digital ad campaigns.

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Gross Rating Points (GRPs) are a standard advertising metric used to assess the effectiveness of a television advertising campaign. It calculates the total reach of an advertisement to a specific audience by multiplying the percentage of the target audience reached by the ad frequency.

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How is GRP calculated?

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Advertisers calculate GRPs by multiplying the percentage of the target audience exposed to an advertisement by the frequency of the ad. For example, if an advertisement reaches 50% of the target audience and is shown four times, the GRPs for that advertisement are 200 (50% x 4 = 200).

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Advertisers use GRPs to assess the overall impact of a campaign by taking into account both the reach and frequency of advertisements. A high GRP indicates that the campaign reached a significant portion of the target audience multiple times, widely regarded as an effective way to increase awareness and sales.

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What is considered a good GRP?

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A "good" gross rating point (GRP) is not defined, as it varies depending on an advertising campaign's goals, objectives, and context. A higher GRP, on the other hand, indicates that a more significant portion of the target audience has been reached more frequently.

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A good GRP achieves the desired reach and frequency levels to effectively communicate the ad campaign's message to the target audience. A higher GRP is usually preferred when the goal is to raise brand awareness or introduce a new product. A lower GRP may suffice when the goal is to reinforce brand loyalty or promote a niche product to a specific audience.

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Furthermore, what constitutes a good GRP may differ depending on the media format. For example, digital media has lower GRPs than traditional media, such as television, with a higher reach and frequency potential.

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Several other factors need to be considered when using GRPs as a metric. For example, when determining the desired GRPs for a particular media schedule, you must consider the extent of the target audience you wish to reach and the number of times you need to reach them to encourage them to take action. The calculation of GRPs varies depending on the medium, and the GRP targets also differ across industries.

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Generally, you should aim to reach 50-90% of your intended market and assume that viewers will require at least three exposures to respond to an offer. New products may require greater frequency than established products, while complex or highly competitive products may require even more frequency.

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Why is GRP important?

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Although GRP has traditionally been used to measure linear TV, it can also serve as a link for advertisers between traditional and digital media. Some ad buyers use GRP to evaluate campaign effectiveness across various media formats.

For example, Nielsen's Digital Ad Ratings use GRPs in collaboration with platforms like Facebook and YouTube to compare digital ads' performance to traditional TV ads, providing large advertisers with more comprehensive campaign performance measurement capabilities.

GRPs offer a standardised method of measuring the effectiveness of an advertising campaign, particularly in traditional media such as television. The following are some of the primary reasons why GRPs are essential:

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Evaluate reach and frequency

GRPs allow you to calculate an advertising campaign's total reach and frequency. This information can be used to determine how many people saw the campaign and how many times they saw it. This information is critical in determining the overall effectiveness of the campaign.

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Comparison across campaigns

GRPs can be used to compare the efficacy of various advertising campaigns. Advertisers can use this data to determine the most successful campaigns and plan future campaigns.

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Planning and optimisation

Advertisers can use GRPs to plan and optimise their advertising campaigns. Advertisers can ensure their campaigns reach their intended audience by setting target GRPs and monitoring progress towards those goals in real time.

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Budget allocation

GRPs can assist advertisers in determining how much to spend on advertising in various media formats. Advertisers can make data-driven decisions about where to allocate their budget by comparing the cost of advertising to the expected reach and frequency.

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What are the limitations of GRP?

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GRP is an effective metric for determining the reach and frequency of a marketing campaign. It does, however, have several limitations, including the following:

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• Inability to measure campaign profitability: GRP only measures the reach and frequency of an advertising campaign but does not provide any information on its impact on sales or revenue
• Over or underestimation of target audiences: GRP is based on the assumption that all individuals in the target audience have the same chance of being exposed to the advertisement, which may not be the case
• Limited analysis: GRP only provides information on reach and frequency and does not provide any insights into the credibility of the media channel or the audience's reaction to the advertisement.
• Incomplete audience coverage: It does not account for viewers who may have switched to other channels during the advertisement break

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Contextual targeting as an alternative to GRP

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To make up for the limitations of GRP, advertisers can use contextual targeting to approach their TV ad campaigns. Here are some advantages of the contextual targeting approach:

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• More precise targeting: Contextual targeting enables advertisers to target viewers based on their watching content. This may be more effective than using demographic or behavioural targeting alone in reaching the intended audience.
• Improved brand security: Advertisers can ensure that their ads are not displayed next to content that could harm their brand's reputation by targeting specific types of content.
• Increased engagement: Advertisers can create ads that are more relevant and engaging to viewers by targeting them based on the content they are watching.

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A successful TV ad campaign requires data and meticulous planning to achieve the desired results. One of the most critical steps is defining and locating your target audience, as your marketing success relies heavily on it.

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GRPs and contextual targeting have advantages and disadvantages, making it essential that advertisers consider the goals of their ad campaign, their target audience, and their budget when deciding which approach to use. Handy tools such as 7M Discovery can help you to leverage contextual data and improve your audience targeting strategy