Media Buying Concepts: GRPs, Effective Reach, and Relative Costs

Using Gross Ratings Points (GRPs)

  • GRPs are a numerical indicator used by media buyers to estimate the potential audience exposed to a series of commercials.
  • It's a summary measure combining program rating and the average number of times a household is reached during a campaign (frequency of exposure).
  • Formula: GRPs=Reach×FrequencyGRPs = Reach \times Frequency

Determining Effective Reach

  • Marketers face budget constraints and must decide between increasing reach at the expense of frequency or increasing frequency to a smaller audience.
  • Several factors influence this decision; for instance, introducing a new product or brand typically prioritizes maximizing reach to create awareness rapidly.
  • Effective reach is the percentage of a vehicle's audience reached at each effective frequency increment.
  • The concept assumes that a single ad exposure may not suffice to convey the intended message.
  • The graph of effective reach (Figure 10-22) illustrates the relationship between total exposure, effective exposure, and the number of exposures.
  • The graph indicates:
    • No exposure to the ad.
    • Total exposures (400 GRPs).
    • Effective exposures (221 ERPs).
    • Ineffective exposure region.
    • The threshold of effectiveness: Minimum number of exposures needed for the ad to start having an impact.
    • Reinforcement of effectiveness: Point where additional exposures significantly enhance the ad's impact.
    • Excessive exposure region.
    • Negative exposure: Point where too much exposure leads to ad fatigue or negative perception.

Determining Relative Costs of Media

  • Cost per thousand (CPM)
    • Definition: CPM indicates how much it costs to reach 1,000 people with an advertisement.
    • Formula: CPM=Cost of ad space (absolute cost)Circulation×1000CPM = \frac{Cost \ of \ ad \ space \ (absolute \ cost)}{Circulation} \times 1000
  • Cost per ratings point (CPRP)
    • Definition: Metric used to determine the cost of reaching one percent of the target audience.
    • Formula: CPRP=Cost of commercial timeProgram ratingCPRP = \frac{Cost \ of \ commercial \ time}{Program \ rating}
  • Daily Inch Rate (Newspapers)
    • Formula: Newspapers=Cost of ad space×1000CirculationNewspapers = \frac{Cost \ of \ ad \ space \times 1000}{Circulation}
  • Television
    • Formula: Television:=Cost of 1 unit of time×1,000Program ratingTelevision: = \frac{Cost \ of \ 1 \ unit \ of \ time \times 1,000}{Program \ rating}