Facebook is opening up a new option for advertisers to buy video ads on the news feed in an incredibly arcane way — by using Gross Rating Points (GRPs) — for the first time in a bid to capture a larger proportion of advertisers’ TV budgets.
The social network has contacted advertisers and their agencies to inform them it will begin testing the new capability over the next couple of months. The test will smart small, with a view to rolling it out wider should it prove useful and popular.
GRPs have been used for TV ad planning and measurement since the 1950s. GRPs are also used for all sorts of other “traditional” advertising, like radio, print, and billboards. It’s a way to measure the reach and frequency of an ad campaign among an advertiser’s target audience.
1 GRP is equal to 1% of the target audience the advertiser wants to reach (not the total number of people who see the ads.) and the GRP goes up depending on the frequency that ad is shown. For example, if a TV program has an average GRP of 10, and an ad is placed on 5 episodes of that program, the campaign has 50 GRPs. The aim for advertisers is to get the highest possible GRPs at the lowest possible cost.
Facebook has been talking with some advertisers about GRPs for years. Back in 2011 it formed a partnership with data company Nielsen (which also, incidentally, is the main source of data for traditional TV ratings in the US) to develop a product called Online Campaign Ratings (in April this year Nielsen renamed Online Campaign Ratings to Digital Ad Ratings) to track the performance of Facebook ads using TV-like metrics — reach, frequency, and gross rating points.
But now Facebook is translating that old-school terminology into the buying of ads too. For years, digital media companies like Facebook have been criticised for using new, confusing metrics — CTRs (click through rates,) CPM (cost per mille/thousand,) CPV (cost per view) — that are difficult to compare with traditional media. By talking the language of traditional media, Facebook is hoping to make it easier for advertisers to shift some of their traditional media budgets over to its platform.
Facebook declined to comment on this story.
It stops Facebook being “unpicked” from the overall media plan
Henry Daglish, managing director at London-based Arena Media, told Business Insider the move should open up more video revenue for Facebook among “laggard” marketers. And, often, those laggards often have big ad budgets — spending most of their money on TV.
He explained that many marketers look at their AV (audio-visual) media plans in three separate buckets — traditional TV, video-on-demand, and online video. That’s partly due to the language and planning and measurement tools being different for each type of ad. But planning all three together more accurately reflects the way consumers are now watching TV/video, across devices, not necessarily live as the programs are scheduled by broadcasters.
“If you don’t bundle [the client may] pull stuff apart. They will say: ‘Can I just take the [UK broadcaster] ITV part of the media plan and not that part over there that I don’t understand?’ And for a [CPG] company, it’s easier for them to say to a big supermarket like Tesco: ‘I have bought 500 GRPs [in total, across TV, video-on-demand, and online video like Facebook is offering,]’ therefore can you stock this many products?’ So this kind of move stops Facebook video from being unpicked from the plan,” Daglish explained.
However, not everyone in the ad industry is convinced.
“TV and Facebook don’t do the same thing”
Becca Braithwaite, media director at global marketing and technology agency DigitasLBi, says allowing video to be bought using a familiar trading currency may provide a lift for Facebook in the near term — but she expects it to be “short-lived.”
“While GRPs may be a useful part of assessing media performance they are by no means the be-all-and-end -all. While looking at the percentage of target audience reached via media is interesting, it ignores all of the more in-depth engagement metrics which allow us to assess digital performance in a far richer and more meaningful way. The desire to carve out more TV budget should not create a dumbed down measurement framework – this will only limit knowledge and hold brands back,” Braithwaite added.
Mark Syal, joint managing director and EMEA director of media practice at Essence, said Facebook and TV play different roles for advertisers — so Facebook should continue talking the language of digital.
“The problem with introducing GRPs to Facebook now is that people in digital aren’t used to GRPs. They should be looking at spend and effect. GRPs were handy looking at one TV campaign compared to another 20 years ago. That was prior to econometric modelling when you didn’t know what impact TV advertising had on sales,” Syal said.
“Facebook is competing for the TV dollar, but TV and Facebook don’t do the same thing and they wouldn’t have the same place on a media plan. Yes you can do video on Facebook but it plays a different role compared to TV. Expressing it in GRP terms isn’t going to help”
Essence primarily uses Facebook to reach niche audiences, and it’s not the main channel for mass consumer reach, he said. Syal thinks introducing GRPs won’t be a “game-changer” unless Facebook also publishes the GRPs of competitor campaigns, on the likes of YouTube or Twitter, for example.
That point of view is a bit of a blow for Facebook, which, as far back as 2012, has been trumpeting how huge its audience is versus TV — presumably in the hope that advertisers will treat it in the same league as TV. Back in 2012 Facebook COO Sheryl Sandberg said Facebook’s audience was three times Super Bowl viewership, “and it happens every day.”
In April this year she explained the huge opportunity ahead of Facebook to poach a portion of marketers’ hefty TV budgets: “If you look at 25% in the US of consumer media time is on mobile, and then 20% of mobile time goes to Facebook and Instagram that would be 5% of US consumer media time. With our largest clients, even our large ones, we’re not close to 5% of their spend.”
Last month Facebook confirmed it was trying out a new video buying format whereby advertisers will only pay for video ads if they are viewed for 10-seconds or more. Previously, advertisers were paying for videos as soon as they showed up in the feed. A Facebook spokesperson told The Wall Street Journal at the time that it didn’t believe this format was the “best option” but that the platform wanted to give advertisers “control and choice over how they buy.”
The same thinking seems to apply with GRPs too. Facebook no doubt doesn’t really want advertisers to buy this way, but offering this option may persuade more marketers to think about Facebook differently and start spending more of their ad dollars there. Once they’re more comfortable with Facebook video advertising, Facebook can then start recommending what it thinks are the better ways to buy and measure on the platform.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.