Gross rating point (GRP) is a key performance indicator that has long been used in traditional advertising to gauge the effectiveness of an advertising campaign. GRP is a measure of impressions as a percentage of a target audience, multiplied by the frequency with which that audience sees the ad. GRP is a valuable tool for measuring the impact of traditional ad campaigns where precise measurement is difficult.
Rating points are widely used in media planning and buying. Since the 1950s, GRPs have been the primary metric for TV advertising buys, with advertisers typically paying publishers based on the ratings points they receive for a particular ad. Although GRP is primarily used in traditional media campaigns, it is also important for digital and mobile marketers to compare and coordinate linear TV and digital advertising campaigns.
To calculate GRP, we must multiply the percentage of a target demographic that is reached by an ad (known as reach) by the number of times that ad is shown in a given campaign (known as frequency). For example, if a campaign has an average of 4 impressions by 1,000,000 viewers, out of a total addressable population of 50,000,000 people, the GRP will be calculated as follows: (1,000,000/50,000,000) x 4 = 8.
The base population used in calculating GRP is typically the largest measured population with reasonable access to the media source. To estimate the total population of a given audience, advertisers may look at estimates of past performance of a chosen channel from market research and measurement groups (such as Nielsen for linear TV).
TRP and GRP measure the same thing but with different levels of specificity. While GRPs show how much of the total population your campaign can reach, TRPs look at the campaign’s performance for a specified target audience within the total population. While GRPs equal one percent of the total audience exposed to an ad, TRPs equal one percent of a given target demographic’s exposure.
When setting GRP goals, advertisers must consider how much of the market they want to reach and how many times they need to reach their audience to achieve their objectives. GRPs are calculated slightly differently based on the medium, and GRP goals vary across verticals. In general, advertisers should aim to reach between 50-90% of their target market and assume it will take at least three exposures for a viewer to act on an offer. New products require more frequency than established products, and complex products or products with a lot of competition will require more frequency.
GRP is an important metric for measuring the effectiveness of advertising campaigns. Although GRP has primarily been used as a metric for linear TV, it also serves as a bridge between traditional and digital media for ad buyers. Advertisers adopt GRP as a way to compare campaign performance across media formats. Large advertisers have been using apps such as Facebook and YouTube, which have partnered with Nielsen’s Digital Ad Ratings, to compare their ad performance versus traditional TV ads using GRPs, giving them more comprehensive campaign performance measurement capabilities.