Are Impressions the Answer to Fragmented TV Measurement?

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

By Jessica Hogue

In recent years, television measurement has been done through two distinct approaches. The first, adopted by more traditional television marketers, relies on gross rating points (GRPs) to evaluate and buy inventory to meet marketing goals. The second, brought on by the evolution of streaming behavior, evaluates based on the standard for digital audience measurement: impressions.

More and more, marketers must straddle these two methods to gain a complete picture of how their media mix is performing. But when forced to operate on both tracks simultaneously, marketers cannot get a clear view of their overall media strategy or its impact on the bottom line.

As traditional television markets are transformed by emerging technologies and world events, the time has come for marketers to set aside the GRP and make the leap to impressions.

 Why Impressions Help Navigate GRP’s Pitfalls

The GRP was designed in the pre-internet days to bring measurability to TV so that advertisers could understand the reach and impact of what was originally a one-way medium.

GRPs are calculated by multiplying the percentage of the audience an ad reaches by the frequency of exposure to its message, as determined by an independent measurement panel. It is intended to represent an informed estimate of viewers exposed to a given ad. However, GRPs can miss critical aspects of viewing. Not only is GRP based on a small audience sample, but it can’t be married with more granular, scaled data to fully portray the fragmentation and variety of modern consumer activity.

While GRP is better than no measurement at all, that’s a low bar for one of the ad industry’s most popular channels. It falls well short of the robust and highly detailed impression data available across most digital media. These technical drawbacks make GRPs especially cumbersome for marketers aiming to build cross-channel or omnichannel campaigns.

Impressions make the valuation equal and uniform across channels, setting standards for a more holistic, intelligent, and balanced measure of campaign success. This is especially critical as more marketers embrace omnichannel programs. According to the recently published “Q1 2020 Customer Engagement Report” from Merkle, 88 percent of U.S. and U.K. advertisers are now implementing a more omnichannel and multichannel approach.

As cross-channel campaigns become increasingly common, marketers using disparate media and screen types need to make apples-to-apples comparisons of inventory. Impressions provide that by helping to optimize reach and performance across a marketer’s most critical channels. They do so using commonly understood metrics that are channel agnostic. Impressions also support greater transparency across all marketing programs, which is something needed now more than ever.

Fortunately, market trends have converged to accelerate the transition away from the opaque GRP toward a more consistent, accurate form of measurement.

TV Is Becoming More Measurable

A major driver of this transformation is the surge in mainstream adoption of connected TV (CTV). According to Leichtman Research Group, CTV now reaches 80 percent of American homes. A report by the ANA and Innovid found that CTV households will grow 82 percent by 2023, with cord-cutter and cord-never households increasing to 44 percent of the population during the same period.

Understanding CTV

The impact of the coronavirus pandemic will only accelerate this trend. This means that TV content is increasingly served in a fully addressable and measurable format and that media buys can be delivered on connected devices. For marketers, this changing dynamic opens a dramatic expansion of new and clearer-cut forms of measurement for even the largest television campaigns.

Beyond the rise of connected devices as the delivery method of choice for television content, the advent of streaming entertainment has expanded the definition of television itself. While a handful of prominent services don’t currently offer advertising tools, several emerging streaming platforms do. NBCUniversal’s Peacock, ViacomCBS’s PlutoTV, and Disney-owned Hulu are either fully ad-supported or offer an ad-supported service tier.

According to IHS Markit, more inventory is on the way. New advertising video-on-demand (AVOD) opportunities are expected to lift U.S. revenue for online video advertising to $27 billion in the next three years. Also, research from Parks Associates finds that one quarter of U.S. internet-connected households have watched free, ad-supported services in the past 30 days. These AVOD platforms are consumed like traditional television and are increasingly viewed on the same screens as linear TV. These platforms are not only expanding the TV category but, as a bonus, are creating new ways to measure and understand TV audiences along the way.

Measuring for Tomorrow

For years, television was considered outside the reach of digital campaigns due to its lack of addressability and imperfect measurability. The adoption of CTV means marketers can now include television as a key piece of an integrated campaign — bought alongside other channels and measured against them as well. The impression makes it easier and more efficient to buy and understand all media, together.

The transition will also bring in more digitally-minded marketers. As budgets shift to digital channels, more marketers have cut their teeth working on highly measurable digital campaigns. The rise of connected television is allowing digital-first marketers to bring more robust metrics and precise measurement in the form of impressions to campaigns that operate at the scale only TV can offer. This, in turn, is enabling teams to eliminate data silos and make more informed decisions about the performance and impact of their messaging across all media channels.

Direct-to-consumer (DTC) brands are a good example of this shift. Ad sales platform MediaRadar finds that digitally savvy DTC brands have doubled TV investments over the past three years, due in part to an explosion in connected devices. Their strategies are evolving beyond social, mobile, and desktop to include TV.

Brands native to digital media that are transacting in TV inventory will help drive the progression from GRP to impressions.

Television will always be foundational for modern advertising. It’s the medium with the widest reach and deepest impact. But its future is no longer that of a standalone channel. The adoption of advanced TV technology and the emergence of streaming services will allow marketers to fully embrace TV in cross-channel and omnichannel marketing campaigns. To bring that future closer, marketers must set aside outdated measurement tools like GRPs and embrace modern measurement techniques that allow for evaluation of campaigns as they’re created today.

About Author: Jessica Hogue is the general manager of measurement and analytics at Innovid, a partner in the ANA Thought Leadership Program.