Reach & Frequency Too Much of a Stretch
July 17th, 2009 by Kathryn Koegel
Who knew that “old” media models would get so hot again. Instigated by a recent eMarketer paper (http://www.emarketer.com/brandmeasurement/) and supported by a cogent argument of Young Bean Song at Atlas/Microsoft (http://community.microsoftadvertising.com/blogs/analytics/archive/2009/07/06/getting-back-to-basics-why-web-advertising-needs-traditional-media-metrics.aspx), we are back to talking about GRPs and Reach & Frequency as the new metrics savior of online display. While I agree that online is becoming a reach medium, it still does not have 100% penetration of the US population and it will not solve the revenue generation problems of online content.
As someone who has worked in both TV and online, while I agree that reach & frequency and GRPs are a useful bridge to “traditional planning” some of their strongest proponents for using them online believe that they are some sort of magic fix for the revenue challenges of content sites. If we were to implement a GRP buy system for all of online, content sites would lose out due to their ability to only add incremental reach to a multi-platform buy. Online ad networks and exchanges that aggregate mass inventory — context be damned — are the ones who would win in this equation. Online content sites are most equated to how print is bought: on audience composition and context more so than reach at cheap CPMs. Yes, online is becoming a reach medium due to the vast amount of usage, but to harnass that reach, you need audience aggregators (for both video content and static types of content). As we have seen, ad networks tend to commoditize inventory and reduce CPMs. It should also be noted that low consideration product categories are notorious at pushing for the lowest possible TV CPMs primarily because they don’t really need context and they buy in such mass. One of the things that I think is really interesting is that packaged goods companies like P & G and SC Johnson have begun to buy cable on a DR basis and use very specific TRPs as the proof point. In a scenario with dare I say it too many media options, more advertisers online and off will be pushing for DR — yes, it will hasten the death of a lot of media or at least move to more of a paid content model.
Tags: eMarketer, GRPs, Microsoft, Online advertising, Reach and Frequency