Content
- What is GRP?
- Why calculate GRP?
- How to calculate GRP?
- Application of GRP in different types of advertising
- Choosing an effective platform for advertising
What is GRP?
Gross Rating Point (GRP) is an important marketing metric used to evaluate the impact of advertising campaigns. It allows advertisers to understand how many times their message has been presented to various audiences through different channels. GRP helps determine what portion of the target audience has seen the advertisement on platforms such as television, radio, outdoor advertising, and the internet. In English, this term has several equivalents, including gross rating, total rating, and gross evaluation coefficient.
Why calculate GRP?
Engagement with potential customers occurs through a multitude of communication channels. Products that frequently appear on various platforms have a higher chance of being remembered. GRP allows advertisers to assess the effectiveness of their campaigns and understand how well they reach their target audience. Additionally, this metric is useful for media planning and comparative analysis of different advertising platforms. The higher the GRP, the more weight the advertising campaign carries, and the greater the likelihood of achieving the desired outcome.
How to calculate GRP?
The formula for calculating GRP is quite simple and involves summing the ratings of the advertising materials. The metric is calculated using the following formula:
GRP = Rating 1 + Rating 2 + ... + Rating n
For example, if the advertisement was shown in three television programs with ratings of 3, 5, and 3, then the GRP would be: GRP = 3 + 5 + 3 = 11. The rating indicates the percentage of the target audience that saw the advertisement over a specified period.
It is important to remember that GRP should not be summed across different target audiences. If the advertisement runs on both radio and television, GRP is calculated separately for each of these platforms. GRP can also be calculated based on frequency and reach:
GRP = Reach (%) * Frequency
For example, if 30% of the audience saw the advertisement 5 times, then the GRP would be 30 * 5 = 150.
Application of GRP in different types of advertising
Formula for TV Advertising
The most common application of GRP is in television. Here, forecast ratings are used, which are then compared with actual ratings. The maximum possible audience for TV advertising is 100% of all television owners. For example, if the advertisement was shown with ratings of 15%, 20%, and 10% over three days, then the GRP would be: 15 + 20 + 10 = 45.
Formula for Outdoor Advertising
For outdoor advertising, GRP is calculated as the ratio of OTS (opportunity to see) to the population of the city. The formula is as follows:
GRP = OTS / City Population * 100
For example, if 40,000 people pass by a billboard and the city's population is 1 million, then the GRP will be: 40,000 / 1,000,000 * 100 = 4.
Formula for Internet Advertising
GRP can also be calculated for internet advertising, although this is less common due to the variety of formats. For video advertising, the same formula can be used:
GRP = Reach * Frequency
For example, if the advertisement was shown 4 times and each time it was seen by 30% of the target audience, then the GRP would be: 4 * 30 = 120.
Choosing an effective platform for advertising
GRP indicates the weight of the advertising campaign: the higher the metric, the more contacts with the audience. However, the budget should also be considered. For example, if placement in the city center costs 100,000 rubles with a GRP of 350, while in a residential area it costs 80,000 rubles with a GRP of 260, then the cost per rating point (CPR) can be calculated:
CPR = Budget / GRP
For our example:
- 100,000 / 350 = 285.7
- 80,000 / 260 = 307.7
Thus, placement on the first billboard is more advantageous, as the cost to reach 1% of the audience is lower.
It is important to remember that GRP should not be the only criterion for optimizing the advertising budget. Consider metrics such as conversions and LTV to make an informed decision.