If a man stands on the corner and shouts a message through a megaphone, everyone who walks past him will hear the message. That’s reach. He talked, they heard it, but did they listen?
Let’s say he’s shouting about a sandwich deal at a local sub shop. If one person who heard him decides to eat at the sub shop instead of the pizza place next door, then we have a winner. But if 900 people walked by and still passed on eating at the sub shop was it worth the cost of the man and the megaphone? Probably not.
The trouble is, no one can predict what a crowd will do, so you put out the best pitch you can, roll with the odds and hope for the best.
The question is, how do we measure the results we get, good or bad? Do we count the 900 people who heard the message (reach) or the 1 person who bought the sandwich (conversion).
It seems like more and more, we’re all about reach. Facebook added this metric to their stats but no one really understands what the number means. (Tell the truth, you don’t really know.)
Now Facebook is looking at that new metric known as the GRP or Gross Ratings Points. This number is determined by frequency x’s reach for a particular channel. 900 people heard megaphone man every day for 5 days = 4500 GRP.
It’s actually calculated on percentages of the target audience, so this is an over simplified version, but the idea is the same. GRP is about measuring reach, which, I suppose, is all we can do, but it’s not right.
The metric we need, in order to gauge success, is how many people an ad influenced. How many people spent their money or followed through on a suggestion because they saw an ad. In the real world, tracking this metric can be tough, but online not so much. So why are we paying to “reach” 900 people when megaphone man clearly didn’t get the job done?
Why? Because if Facebook only charged for ads based on conversions, they wouldn’t make any money.
Now suppose we put megaphone man on commission. He only gets paid a percentage of every sale he sends our way. Think he’ll work harder? Think he’ll be more persuasive and choose a better corner and a better time for his message?
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