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Definition Of Gross Rating Points And How To Calculate It – 2024 Guide
Last Updated on: November 16th, 2024
The GRP can be abbreviated for “gross rating points,” and is a key measure in the 70 billion dollar US television advertising industry. It’s how marketers decide how and where to put advertisements, and it’s how TV networks prove they’re worth all that cash. Simply said, it’s a math equation that media planners and purchasers use to figure out how many individuals in a targeted demographic have seen their advertisements.
These are a measure of an ad campaign’s overall performance over a period of time. This figure does not reflect the effectiveness of your advertisements; rather, it refers to the number of individuals who were listening to the station at the time your ad aired.
What are Gross Rating Points?
Gross rating points (GRP) are a way to gauge how effective your marketing campaign is. The focus with GRP is on the amount of material that can be supplied. GRP considers how often you expect to show an ad and how much of your target audience you can reach through your selected channels. GRP is a shorthand for the possible scope and volume of an ad’s exposure, and it’s mostly used in media planning and ad purchasing.
Also, GRP has been the dominant statistic in TV advertising buys, notably in the United States, since its introduction in the 1950s. GRP offers the option of combining TV and digital ad transactions in digital advertising, particularly for video. Some marketers claim that if GRP is utilized for online media, it will allow for direct comparisons of TV and digital ad values, as well as make executing crossover campaigns easier.
How Does GRP Work?
A simple formula may be used to determine Gross Rating Points:
Advertisement Frequency x Percentage of Audience Reached = GRP
How do you reach a certain percentage of the audience? To begin, look at the entire population of your target audience. Then you make educated guesses about historical performance, such as how many people in a certain demographic have generally tuned in to your preferred distribution medium or channel. These figures are based on surveys and market research conducted by companies like Nielsen.
Here’s an illustration. Let’s assume you want to broadcast an advertisement five (5) times during a certain television show. According to Nielsen, that show is seen by 25 million households each week. Because there are 118.4 million TV-watching homes in the United States, you’d calculate your reach by:
[illustration of computation: (25 M households / 118.4 households) x 100 = 21.1% of audience reached]
You’d then calculate GRP for the ad by taking into account how often it runs:
21.1 x 5 = 105.5 GRP
Yes, a Gross Rating Points value greater than 100 can be achieved. GRP does not filter for unique audience exposure, as the “gross” portion of the term indicates; that is, it can and does anticipate to count viewers several times. Advertisers who calculate GRP over a longer time period (to predict campaign performance over a month or a year, for example) will have higher frequency numbers, resulting in greater GRP values.
Keep in mind that the GRP calculation for genuine ad campaigns may grow rather complicated. Your GRP calculations will have to accept additional values when you examine things like the different networks or publications you wish to engage with, the variety of audiences you can acquire from different locations, and so on.
Aside from those considerations, keep in mind that GRP does not prescribe certain techniques. A GRP figure simply represents your campaign’s entire potential reach. Multiple combinations of ad frequency and estimated audience coverage might result in the same GRP.
GRP and Ad Buying
Rating points can be used to negotiate ad deals, notably in television advertising. Advertisers can, for example, base their payment rates on the number of rating points they receive for a certain ad spot. In this context, GRP serves as a rapid approach for advertisers to communicate the goals of their ad campaign. Publishers can also use GRP as a shorthand for the value that advertisers might expect from the ad spots they’re interested in purchasing.
Why Does Gross Ratings Points Matter?
GRP has traditionally been a TV-centric measure, but that doesn’t imply it should be ignored by digital advertisers. GRP has the ability to serve as a bridge between conventional and digital media for some marketers. These advertisers argue that if digital advertising embraces GRP, assessing campaign effectiveness across media types would be considerably easier. As a result of these comparisons, it may be easier to persuade advertisers to transfer more portions of their spending to digital. Facebook, for example, now collaborates with Nielsen to compare the success of Facebook ads to traditional TV commercials. Advertisers may use the data to sketch out how digital fits into their campaign strategies, opening the door for more comprehensive campaign performance monitoring.
Is it available online?
CTR (click-through rates), CPM (cost per thousand views), and CPV (cost per view) are the most common metrics used in internet advertising today. Many marketers have requested digital media firms to provide GRPs, arguing that doing so would make it simpler to compare TV and digital advertising on an apples-to-apples basis. To some extent, digital media has given in because it wants a piece of the 70 billion dollars spent annually on television advertising.
TRP (total rating point) Buying is a Facebook tool that utilizes Nielsen’s Digital Ad Ratings data to assess how well Facebook’s advertising work alongside TV spots. Snapchat collaborates with Nielsen as well. GRPs are also available on Hulu and TV company-owned streaming services. It’s utilized when a typically television-heavy marketer shifts their budget to digital in order to target consumers who don’t watch television.
Final Thoughts
The Gross Rating Points continue to be the most often used statistic in the purchase of television advertising. It’s crucial to keep in mind that GRPs are only used for planning and measurement. As a result, GRPs may be combined across media types to create a single total assessment of a campaign’s impact.
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