The world of ad tech is full of terms, abbreviations, and acronyms.In order to promote consistency across our booming industry, we’ve created a DOOH glossary to clarify any of the confusing jargon you’re likely to encounter.*Based on the iAB UK’s industry-wide advertising standards. Show
Reach, Frequency, Ratings, GRPs, Impressions, CPP, and CPM in AdvertisingWhat are GRPs, Ratings, Reach, Frequency, and Impressions in advertising? How are they calculated? And how do they relate to each other? When creating a media plan, it’s important to have a firm grasp of these often misunderstood advertising terms, even if they are built into your media planning software. This article aims to give you clear, concise definitions and examples of important advertising terminology: Media Market, Population, Rating, Reach, Frequency, Gross Rating Points (GRPs), Impressions, Cost per Point (CPP), and Cost per Thousand Impressions (CPM). Media CostMedia Cost is the price you pay to present your advertisement. There are many different ways to price media including points, impressions, clicks, leads, actions, days, weeks, months, etc. However, it ultimately boils down to the amount you pay to present your advertisement, which is Media Cost. Media Cost excludes the cost to create the advertisement and other costs. Media MarketMedia Market or Market describes the set of people that could potentially be exposed to your advertisement. The media market is often described using Designated Market Areas or DMAs, which are trademarked by Nielsen. However, Media Market can be any market you define. More on Media Markets… PopulationPopulation is the total number of people in your Media Market. RatingRating is the percentage (0 to 100) of the Media Market that will likely be exposed to your advertisement. Rating is an estimate based on past performance often sourced from surveys. More on Ratings… Average PersonsAverage Persons is the number of people that, on average, will be exposed to each Spot. Average Persons is calculated by multiplying Population by Rating then dividing by 100. SpotA Spot is a single broadcast of an advertisement. Typically, an advertising placement includes multiple spots. Gross Rating Points (GRPs)Gross Rating Point (GRP) is a measure of the size of an advertising campaign by a specific medium or schedule. GRP is calculated by multiplying the number of Spots by Rating. For more, see How to Calculate GRPs – Gross Rating Points. Cost per Point (CPP)Cost per Point (CPP) is a measure of cost efficiency which enables you to compare the cost of this advertisement to other advertisements. CPP is calculated as Media Cost divided by Gross Rating Points (GRPs). For more, see How to Calculate Cost Per Point (CPP). ImpressionsImpressions are the total number of exposures to your advertisement. One person can receive multiple exposures over time. If one person was exposed to an advertisement five times, this would count as five impressions. Impressions are calculated by multiplying the number of Spots by Average Persons. Cost per Thousand Impressions (CPM)Cost per Thousand Impressions (CPM) is another measure of cost efficiency which enables you to compare the cost of this ad to other advertisements. CPM is calculated as the Media Cost divided by Impressions divided by 1,000. ReachReach is the number of people in the Media Market that will likely be exposed to one Spot. Estimating reach is tricky because when you run an ad multiple times, the same person may see the ad more than once but you only want to count them once in Reach. There are many different methods to estimate reach. Most rely on software, such as Bionic’s Media Planning Software, to calculate reach. More on Reach… Reach PercentageReach can also be expressed as a percentage, which indicates the percentage of the Population that is exposed to at least one Spot. FrequencyFrequency is the average number of times the advertisement will be presented to the Reached Population. One way to calculate frequency is to divide the number of Impressions by the Reach. Another way is to divide GRPs by Reach Percentage. Example – Broadcasting 5 Radio Spots in ChattanoogaHere’s an example of all of the above advertising terms in action. In this example, we’re broadcasting 5 radio spots at a cost of $500 each to the Chattanooga market.
Related PostsWhat refers to the percentage of homes exposed to an advertising medium?the total of all the audiences delivered by a media plan. rating. the percentage of homes or individuals exposed to an advertising medium. continuity. the duration of and advertisement message or campaign over a given period of time.
What is the number of people exposed to an advertisement known as?Impressions are the total number of exposures to your advertisement. One person can receive multiple exposures over time. If one person was exposed to an advertisement five times, this would count as five impressions. Impressions are calculated by multiplying the number of Spots by Average Persons.
What refers to the number of people or households that can come across your advertisement through a given media type?Reach is the total number of households or (with modern, online advertisements) the number of individual consumers exposed to a specific medium or entertainment platform over a standard time.
What term refers to the number of different people or households exposed at least once to a medium during a given period of time quizlet?Reach. the total number of unique people or households exposed at least once to a medium during a given period of time, usually four weeks. frequency. measures the intensity of a media schedule, based on repeated exposures to the medium or the program.
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