Nielsen EVP McKinley On The Gross Rating Point: We Need Digital To Speak Brand

nielsenFor marketers, the ease of using a single buying metric – The Gross Rating Point (GRP) – across traditional and digital channels remains attractive, but whether it can be effectively extended to digital remains to be seen as this survey of industry executives indicated last year on AdExchanger.

Last week, comScore stirred the GRP pot and introduced its solution to unlocking digital for marketers and calling it the “vGRP.” Read the interview with comScore exec Kirby Winfield here.

AdExchanger reached out to Scott McKinley, EVP of Advertising Effectiveness at Nielsen, to understand how his company approaches the GRP and differentiates. Can you discuss at a high-level your ideas – and Nielsen’s – on the GRP and the need for it?

Scott McKinley:  The problem of measurement for digital is an old problem. It started shortly after the Internet achieved commercial scale in the mid 90’s, and it has persisted until today. In fact, in November, I was at two different CMO conferences and can say that the CMOs of November 2011 aren’t that much different in terms of their sophistication around an understanding of how to use digital in their mix than the CMOs of 1998. It’s such a big problem and it’s been attacked from so many different directions. And, the industry has not been successful at coming up with a solution to offer a true understanding of how to measure digital in the context of all the media opportunities that an advertiser has.

And that has been part of the problem, too – as digital has gotten more and more sophisticated and “sharpened” its set of tools for measurement, it’s done it myopically, and in a way that’s alienated the brand advertiser, which is of course the opposite of what was intended.

As a result, you get these digital advertising systems that are so complex and interwoven with each other and they’re all answering questions that have nothing to do with brand advertising.

They’re answering measurement questions that have to do with direct response. That’s the irony: the smarter online gets about direct response, all they’re doing is improving a language that the brand advertiser doesn’t speak.

We as an industry, as a research industry, and from the medium’s perspective as well, we’ve got to get digital to speak brand. For years, it was digital trying to teach brand advertisers how to speak its language, and the brand advertiser basically rejected it. To a brand advertiser – to Tide or Pampers or Clorox, or any of these brands – a click really doesn’t mean anything. What means something is changing attitudes and reaching audiences.

The CMO wakes up and thinks every day, “How do I allocate my resources to drive shareholder value?” That doesn’t mean just digital. They need to evaluate performance of advertising across the entire media mix.

To me, that’s what the problem is. That’s why it still exists, that’s why it’s as big as it is, and that’s why it’s important to solve it in the right way. For us, all of that drives our strategy. Our strategy is to come at it from a whole media perspective, to produce metrics and measures that speak to the whole media plan, not just one dimension of one media. That’s where we think the game can actually change.

It’s great that innovation is happening in the space. We think things like ad visibility is one of many, many variables that determine whether an ad is effective or not. What we want to focus on is what the advertiser needs to support decisions. And we look at what the advertiser’s objectives are for advertising – and that’s sales. Our goal is to produce metrics that can be used for optimization that come as close to sales as possible.

Ad visibility is one important metric, but things like measuring the ability of the consumer to remember seeing the ad and to associate the ad with a brand – we think that these are the kinds of things you optimize against. They get closer to sales than anything else out there.

Can you drill into what some of the other critical metrics are for providing the CMO a sense of reach for digital audiences?

You have to look at the whole funnel. There’s a path from the moment where a marketer decides to invest money to the point where sales are produced as a result. The first thing is making sure that you’re reaching the right folks. If you don’t reach the right people, your ad’s not going be reacted to and resonate. Reach is hugely important. Nielsen has spent a lot of time and effort and money coming up with what we think is the best-in-class product for measuring reach, and that’s called Online Campaign Ratings, OCR. It provides the most accuracy around which audiences you’re reaching online and can answer the cross media question because it produces a GRP that can be compared to the GRPs in other media.

Reach is important. Imagine your hundred million ads go out there. Visibility becomes one of the things that you want to consider as a diagnostic to understand why you did or why you didn’t get the response that you wanted to get. You think about visibility, engagement, clutter and time spent – there are a dozen dimensions to what happens when the ad shows up in front of the user, or is intended to show up in front of the user – each of which has to be considered an opportunity for optimization.

Those things are a means to an end, such as the ability for an ad to show up in an environment and be remembered, be associated correctly with the brand, and leave a lasting impression in that consumer’s mind. Those are the things that we offer as optimization metrics. When you think about pushing dollars in the marketplace and then optimizing against a response, you can’t optimize against sales, because you don’t have any direct response action that you can immediately optimize against. You have to optimize against something else.

We produce a breakthrough score today which allows the advertiser, at-scale, in digital, to understand where and for what creatives and what audiences the ad resonated and left a lasting impression that was the correct impression. That we think is the most valid metric that’s closest to sales that can be used responsibly for campaign optimization.

Now, looking back between the reach and effectiveness parts – the breakthrough part – you begin to look at a bunch of dynamics that will determine whether or not you succeeded in your goal – and one of those is visibility. Of course that’s important, but there are others as well.

Finally, when you think about optimizing the funnel and all of these metrics, you have to think about the opportunity gap for optimization. With Reach – there’s tremendous opportunity for optimization. We see with our OCR product that some campaigns can be as much as 50 to 60 percent off in terms of reaching the target. That’s a huge opportunity for improvement.

If you have accurate data about who you’re reaching with your digital campaign and you have confidence in that data, you can achieve enormous gains effectiveness and ROI by fixing your plan to better reach the folks you’re trying to reach. That’s an enormous optimization opportunity.

Something like visibility, that’s going to be 10 to 15 percent at most, so it is an opportunity to optimize and increase ROI, but it’s going to produce relatively small net gains. When you focus on breakthrough measures, such as ad recall, average ad recall for the online medium hovers around 20 percent so that’s an 80 percent opportunity for optimization, to improve recall measures by adjusting creative or changing the environment in which you deliver your ads.

Even when you look at the whole funnel and the dynamics and metrics that you can attempt to optimize against, you have to start with reach. You focused on “Where can I get the biggest bang for my optimization buck?” And, “Where do I put my effort to change the outcomes of my advertising campaigns?”

You have to start with reach, and you have to leverage the most accurate data available, and that is OCR. Then you have to focus on the next biggest opportunity to optimize the campaign, which is the breakthrough metric, which is how successful was the creative in resonating with this audience, where it showed, and among which demographic cuts? That’s where we think the second biggest optimization opportunity is.

Beyond that, there are a bunch of different things that you can look at. You can look at visibility; you can attempt to improve that. You can look at clutter, you can look at time spent, you could look at a whole bunch of different factors, but we think that reach and breakthrough are the most impactful in terms of changing the campaign’s actual effectiveness.

How far away is an effective GRP that spans all digital touchpoints – including mobile, tablet, connected gaming, etc – in your opinion? What are you telling the marketers right now?

Well, it’s a tough question. We’re actually moving faster to a cross‑platform rating point that integrates online and TV than we are in cracking every single nut in the digital world. The reason for that is because the digital world, as you know, is messy and problematic. You have different systems – mobile is an enormous challenge, tablet is a challenge, connected gaming systems – these are all technological challenges that have to be solved. Rest assured we’re running at that full speed, but we think the place to make the biggest step forward for the advertiser in terms of understanding how digital fits into the mix is in producing a cross‑platform GRP that allows them to view online and television through the same lens, from a reach and resonance perspective, so a reach and effectiveness perspective.

Timeline – we’ll have a cross platform GRP, a cross platform rating point available this year. That will come with an effectiveness measure as well. As far as how long it’s going to take to crack every one of [those digital channels]… there is no answer there, because every two months someone releases a new device or platform and we have to go figure it out. That’ll be an incremental undertaking, where little by little we knock off– for example in mobile, Apple, which we already can measure – then Android, then Microsoft, then we go over to gaming. It’s just going to be a process.

By John Ebbert

Follow Nielsen (@NielsenWire) and AdExchanger (@AdExchanger) on Twitter.

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1 Comment

  1. Chris Karl

    Great to see Nielsen leading the charge on the cross platform GRP. Agree on your points above. However, a reach based campaign online that uses the same audience criteria as a broadcast TV buy is not going to be effective (the cross platform GRP will have to be used carefully). The brand advertising value proposition with digital media needs to be designed/weighted/customized for each marketer (and each brand), but the baseline formula is the same. Optimized visibility, environment, time spent, and reach are some of the pieces to the puzzle (many more pieces than a broadcast tv buy).

    There is one advantage to Digital Media (over other channels) when it comes to brand advertising: “reach” doesn’t have to mean mass marketing in a broadcast TV sense. Online reach can be narrowly defined and targeted to create more assertive branding initiatives. Proactive branding vs. passive branding has tremendous potential for moving the needle for marketers in specific segments of their consumer base (beyond geo and demo). This is where ROI and Attribution models will become useful in the coming years.