Article by Dynamic Logic's Ken Mallon: To GRP or not to GRP? August 26, 2009
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To GRP or not to GRP? Is online branding broken? These are questions facing Geoff Ramsey of eMarketer and the industry as a whole. Geoff recently commented on The Great GRP Debate, in his July 13, 2009 article. Also, in July, eMarketer published Online Brand Measurement: Connecting the Dots, based on industry interviews.
The continually debated issue is around metrics, metrics, metrics. What are the correct metrics? Are some better than others? Some claim online measurement is a mess. Is it?
GRPs are important … with a caveat
Why are GRPs important? Well, two reasons. First, many large companies use GRPs as inputs to media allocation and other models. They depend on these models to understand the impact advertising in each media is having. Although there are other and, sometimes more cost-effective, methods for evaluating the independent and synergistic effects of advertising across different media, these GRP modeling approaches have been in place for many years and change is difficult.
Second, GRPs are constructed based on reach and frequency. Reach is important because it’s an input to another important formula: impacted reach = reach times ad effectiveness. More on impacted reach in a moment.
So, in the GRP debate, I’m on the GRP side with a caveat. I think reach is critical to determining overall impact or impacted reach, as I call it, of a campaign, but GRPs may over-simply the reach concept.
GRPs over-simplify the concept of reach, especially online.
If you have reach and frequency, you can calculate GRPs, but GRPs are an over-simplification. Here is why. In the online world, there is a big difference in impact between delivering 10 million impressions to 5 million people versus delivering 10 million impressions to 2 million people. They can both represent the same number of GRPs, but the impacted reach of the latter example is far less.
The table below steps through the math as to why this is so. This concept can be illustrated for any measure of perception or with sales data. In this example, I chose brand favorability as the perception metric and the data come from the Dynamic Logic MarketNorms database. I looked at three different exposure frequency groups: those that saw ads from a given campaign exactly once, those who saw 2-3 ads and those who saw 4 or more ads. The data are aggregated across 71 campaigns. Those who saw 2-3, had an average exposure of 2.3 and those who saw 4+, had an average exposure of 10.2.
From the above example, one can clearly see that the total effectiveness or impacted reach, in the three scenarios, is vastly different even though the number of impressions, which are the closest things we have to GRPs, are the same. I went into more detail on this in an i-Media connection article two years ago. Note how dramatically reach decreases at different frequency levels. The reach among the 4+ group is less than 1/10th of the reach in the single frequency group. The impact, on a percentage basis, is higher in the high exposure group (2.7% became favorable to the tested brand who otherwise would not have been, versus <2% in the <4 exposure groups) but the loss in reach cannot be made up and shows itself in the impacted reach calculation.
The problem of having similar GRPs associated with vastly different impact is less of a problem offline. In the offline world, once you choose, for example, a magazine, TV show or other offline channel, the range of possible frequencies is somewhat limited. Online, someone can see your ad dozens or even hundreds of times.
More on impacted reach and ad effectiveness
Impacted reach is the number of people impacted by a particular ad campaign. And, I believe that in 90% of cases, impact boils down to one of two things. For an ad campaign to be considered effective, in any media, it has to either change people’s perceptions about your brand or product or it has to drive incremental sales or both.
So, ad effectiveness = changes in perceptions + sales impact. Ad effectiveness is not about ad interaction, clicking, driving traffic, etc. These post-view behaviors can be very important diagnostically, but I don’t think they belong in the ad effectiveness equation. I’d put them in the category of very important diagnostic information. They’d be in the same category as finding out if someone read the newspaper circular or finding out if someone noticed an end-aisle display. They are important and can help you understand what went wrong when perceptions and/or sales are not impacted, but they aren’t endpoints in themselves. This is why Dynamic Logic launched AdIndex Connects with Compete so that we can now provide enhanced post-view behavioral data in addition to the attitudinal and sales impact metrics. It’s a very valuable layer of insights.
Is brand impact measurement broken?
Now to the issue of online brand impact measurement. Is it broken? In the eMarketer Brand Measurement article, there is a nice section citing Dynamic Logic MarketNorms data. It shows that, on average, online advertising lifts brand metrics. But, it also shows that there is great variability in results and that the bottom 20% of online ad campaigns actually have negative impact on perception.
Based on our further research, the biggest driver of success versus failure is the quality of the ads. So, we believe that in-market optimization of ads should not be based on click rates or interaction rates but, rather, on creative quality. Conducting a copy test before or early on in the campaign, can have a huge positive impact on results.
So, we do not believe online branding is broken and neither is measurement. Advertisers conduct thousands of research projects per year that include brand impact measurement as part of the accountability of the campaign. It is not too difficult to also compute impacted reach and ROI metrics such as impacted reach per dollar spent. Advertisers who focus on good creative tend to be more successful and we support folks like the Online Publishers Association who are pushing the envelope by launching new ad formats that more closely mirror magazine advertising.
Thanks, eMarketer for the continued great articles. Look forward to commenting more in the future.
Ken Mallon
SVP Custom Solutions
Dynamic Logic
