Pulse cranberries with 1/2 cup granulated sugar in a food processor until finely chopped (do not purée).
Transfer to a sieve and let drain while making batter.
Sift together flour, baking powder, and salt. Beat together butter and remaining 1 1/4 cups granulated sugar in a large bowl with an electric mixer at medium-high speed until light and fluffy, about 5 minutes with a standing mixer or about 8 minutes with a handheld.
Add eggs 1 at a time, beating well after each addition, then beat in vanilla. Reduce speed to low and add flour mixture and milk alternately in batches, beginning and ending with flour and mixing until just incorporated.
Spread one third of batter evenly in well-buttered loaf pan, then spoon half of drained cranberries evenly over batter, leaving a 1/2-inch border along sides. Top with another third of batter and remaining cranberries, leaving a 1/2-inch border along sides, then cover with remaining batter.
Bake in middle of oven until golden brown and a tester inserted in center comes out without crumbs, 1 to 1 1/4 hours. Cool cake in pan on a rack 30 minutes.
Invert cake onto rack.
Serve warm or at room temperature.
• Coffeecake can be made 1 day ahead. Cool completely, then store in a cake keeper or wrapped in foil at room temperature. If desired, warm in a 350°F oven 15 minutes before serving.
