Pharma Ups Its Investment in TV DTC Advertising

Ever since the U.S. allowed direct-to-consumer (DTC) advertising, a majority of the ad dollars were spent on TV, which made sense in past years because that's where the "target" audience spent most of its media consumption hours.

I guess 2014 is no exception: 70% of the DTC spending last year went to TV!

But wait! 2014 appears to be exceptional in that it saw the highest percentage spent on TV since at least 2001.

I plotted the data to illustrate the trend.


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GRP and TRP

GRP (short for Gross Rating Point) is the sum of ratings achieved by a specific media vehicle or schedule. It represents the percentage of the target audience reached by an advertisement. If the advertisement appears more than once, the GRP figure represents the sum of each individual GRP. In the case of a TV advertisement that is aired 5 times reaching 50% of the target audience, it would have 250 GRP = 5 x 50% -- ie, GRPs = frequency x % reach.

A Target Rating Point (TRP) is a measure of the purchased target rating points representing an estimate of the component of the target audience within the gross audience. Similar to GRP (short for Gross Rating Point) it is measured as the sum of ratings achieved by a specific media vehicle of the target audience reached by an advertisement. For example, if an advertisement appears more than once, reaching the entire gross audience, the TRP figure represents the sum of each individual GRP multiplied by the estimated target audience in the gross audience.

In the case of a TV advertisement that is aired 5 times reaching 50% of the gross audience with only 60% in the target audience, it would have 250 GRPs (= 5 x 50%) -- ie, GRPs = reach x frequency and 150 TRPs (=250 x 60%).

Both of these metrics are critical components to determine the marketing effectiveness of a particular advertisement.

http://www.ksg.harvard.edu/case/3pt/berkovitz.html

Here is a link towards a more detiled outlook on an entire Media Plan.

More to come on these topics in detail soon..