Why digital GRPs are Inevitable

Friday, April 27, 2012

By Adam Kleinberg

Last week, I was one of 35 marketing professionals invited to the San Francisco Videonomics event up high on the 32nd floor of the Westin St. Francis. There were microphones at every seat, a nice touch that made the session a true collaborative summit and made every attendee part of the conversation.

Last week, I was one of 35 marketing professionals invited to the San Francisco Videonomics event up high on the 32nd floor of the Westin St. Francis. There were microphones at every seat, a nice touch that made the session a true collaborative summit and made every attendee part of the conversation.

Nielsen presented and shared how it was deriving their new version of digital GRPs. The speaker made the point that big budget marketers were "the customer" when it came to buying media and that's why it was necessary to have a digital GRP.

If you're familiar with this argument, you'll think it obvious that there was quite a bit of disagreement from the crowd.

Nielsen is right, however.

The moderator asked my opinion on the matter, so I somehow got injected into the conversation explaining to a marketer from Cisco why anyone in their right mind would want a GRP when there were "better" digital metrics available to us now.

Why GRPs matter

First, what is a GRP. It's short for Gross Rating Point. It's a measure that media planners (non-digital ones) have used to measure the size of an audience that views a certain media vehicle. Specifically, it's the product of the % of target audience reached by an ad and the frequency the see it.

Who determines what % of the target audience is reached? Well, Nielsen does, which is why any suggestion that they might make about the need for a digital GRP is suspect. They poll Americans to find what a sample of them watched last night.

I remember being a kid and we got the survey once. For a week or a month the whole family diligently kept records of what we watched. Today, Nielsen uses " electronic metering technology " to measure what we watch and when.

It's an imperfect science to be sure with extrapolations of sample data to come up with determinations of "reach," but what's important to remember is that they report based on a percentage of the population you want to reach .

Brand marketers—actually, I should say big brand marketers—have over the past fifty years come up with nice mathematical formulas that say I need X many GRPs to launch this product. They buy the GRPs, they run the ads, they launch the product, and people buy the product.

The digital perspective

Talk about GRPs for digital infuriates and confounds digital marketers. Extrapolating from sample populations is simply prehistoric. Digital metrics actually count real numbers. We can not only look at who we reach, but how they engage.

In the words of Henry Ford, "If I asked my customers what they wanted, they would have told me a faster horse."

Why big marketers matter

The vast majority of us today are embracing digital. We are the 99%.

We are using data to inform our choices and we are using it to measure our decisions. We are not extrapolating, we are counting. Nielsen themselves just showed data yesterday that proved empirically that online video worked better TV across all brand metrics.

Why does this handful of dinosaurs matter?

They matter because they have all the money. The money that we want. Online video spend accounts for about 2%, maybe 3%, of the money spent on TV. The McDonald's, Fords, P&Gs and Coca-Colas of the world spend about 90% of that TV money.

The digital world keeps clamoring for these guys to shift more money toward digital. Why won't they?

The answer is because they are comfortable doing things the old way. Not a very good answer, perhaps.

Should we give them faster horses?

We could make the argument about the efficacy digital metrics. They are not perfect. If you've ever looked at Omniture report next to a Google Analytics report for the same website, you know that there are discrepancies. What about ads that are below the fold? Is an impression really an impression if no one sees it?

Those are good question, but they make things messy. Now, your not just comparing apples to oranges, you've got granny smiths and fujis and macintoshes.

For now, let's make some assumptions:

1. Digital metrics are better than traditional metrics. Debate it if you want, but I'm assuming it's true.

2. People selling digital media want a bigger slice of budgets. (don't think that's disputable.

3. People paying for media don't give a damn what digital media sellers want.

Now, let's take media out of the equation and substitute coconuts. Let's pretend we are visiting an island. On that island people have always eaten purple coconuts. They love purple coconuts. They spend all their clams on purple coconuts.

You arrive on this island with a trunk full of blue coconuts. Studies in your faraway land prove that blue coconuts are healthier. People who eat blue coconuts for three years live longer. Yet when you lay them out on your blanket in the market, the islanders look at your queerly, but don't buy them.

Soon, many more of your homelanders arrive on the shores of this island with trunks of blue coconuts that the islanders don't seem to want.

Eventually, the islanders will see the wisdom of your ways. But for now you have a choice: make a ton of clams selling purple coconuts until people come around, or make a very meager living selling superior blue coconuts.

You may be the Steve Jobs of coconuts. You may say, "I'll wait!" Eventually, you'll be rich, I'm sure.

But in the meantime, it's inevitable that there will be a Bill Gates of coconuts who will be happy to collect the islanders' clams for the good-enough purple coconuts they seem to be happy with.

Now substitute billion-dollar advertising budgets for clams and you'll see why digital GRPs are inevitable. There will always be a market for the things buyers want to buy—even if they aren't the very best things. Right now, buyers want GRPs because that's what they're used to.

And that's why Nielsen, ComScore and Google are scrambling to introduce them.

It's inevitable.

About the author
Adam Kleinberg

Adam Kleinberg is CEO and and a founding partner of Traction. He has written over 75 articles in publications like AdAge, Adweek, Fast Company, Forbes, Mashable and Digiday.

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