Audience Measurement & Advertising

by Alix Kraft
Television audience measurement and advertising are closely related, as programs and networks rely on advertisers to spend money targeting viewers. Therefore an accurate and reliable system that measures the number of audience viewers who watch the program, and more importantly, stay for the commercials is one of the most important tools in the television industry.

Audience Measurement


Currently, Nielsen is the global leader in measurement and information, using multiple methods and tools to measure audiences’ viewing and buying habits. One method that Nielsen measures viewership is through diaries. During “sweep” periods, which are roughly four times a year, Nielsen collects over two million paper diaries from across the country.1 Because this method of measurement has been found to be unreliable and limited, Nielsen has moved away from diaries and towards other methods such as TV meters and Local People Meters which capture information on when and what’s being viewed and, in the major U.S. markets, specifically who and how many are watching. The new system uses an electronic meter on the television and assigns a button to each family member. The system better tracks the viewing habits of each individual, allows Nielsen to increase its sample size (from 500 to 800 homes per city) and measures local markets’ viewing every day.2
At the local level, Nielsen measures television audiences per market, using a different method depending on the size and demographics of the market. In the top 25 markets, local people meters (LPM) are used to electronically capture program tuning and program viewing.3 In the next tier markets, those ranked 26-56, set meters are used to measure audience viewership year-round. In markets ranked 26 and above, diaries are still filled out during the quarterly sweeps periods, however this is the only method for audience measurement in markets ranked 57 and above.
Because of advancing technology and the multitude of platform screens on which viewers can now watch programs, Nielsen has had to adapt and learn how to stay attentive to the “diverse, demanding and connected consumer.4” In 2005, Nielsen began measuring usage of DVRs and in 2007, Nielsen acquired NetRatings so that they could measure new media such as Internet and digital media through television and online surveys.5
In the past couple of years, audiences have increasingly turned to other platforms in order to consume content. Although TV still reaches more people each day than any other media6, consumers today have an increasing amount of screens in which to watch programming. In 2009, Nielsen launched it’s Anywhere Anytime Media Measurement, or A2/M2 project, to measure television viewing on television, mobile devices, and online.7 The A2/M2 initiative concluded that almost 99% of programs watched in the Unites States are still done on television, although the amount of DVRS, online video streaming, and mobile video viewing is steadily increasing.
Most recently, Nielsen’s cross-platform homes is an innovative panel that takes half of the homes used in Nielsen’s National People Meter, and measures the relationship between internet and TV, simultaneous use patterns, and gives a single extended screen ratings that include audience viewership of programs watched online, on live television, or On-Demand.8

Ratings and Shares

Average audience can be expressed as a rating or projected audience. A program’s rating and share are audience measurement percentages determined by Nielsen. Rating points are calculated as the percentage of television sets tuned to a certain program out of the total television households in the sample area. As of September 2010, Nielsen estimates that there are 116 million television households in the United States.3
RATING =   households tuned in to a given program  
all households with television
A share is measured by the percentage of television sets in use that are tuned to a given program while it is on the air. Knowing the total number of households using the TV during a specific time, or HUT level, can help determine audience share. The share is a percentage of HUT (Household Using TV), whereas the rating is percentage of the universe. In essence for share, the TV set must be on, whereas for rating, whether the TV is on or off doesn’t matter.
SHARE =       households tuned in to a given program                           
 all households tuned in to TV at that time (HUT)


The ratings, shares, and audience measurements that Nielsen provides, aids television programmers with scheduling as well as provides information for local and national advertisers. Depending on the popularity of a network, program, or time-slot, rates for advertisers are determined. Advertisements take airtime away from programs, and commercial breaks have become increasingly longer. Today, the standard half-hour of television contains 22 minutes of program and 8 minutes of commercials – 6 minutes for national advertising and 2 minutes for local.13
TVB’s 2010 Media Comparisons Study shows that television reaches more consumers than any other kind of media daily, including newspapers, radio, the internet and mobile media. Among the key findings from the 2010 study, include:
  • Television reaches nearly 90% of Adults 18+ every day, and over 80% of every age, income and education break included in the study.
  • When asked to cite the one type of advertising that is the most exciting, influential, persuasive, authoritative and engaging, television advertising receives the highest scores, with significant margins over all other media.
  • Television advertising is also cited as the dominant source of new product information, compared to advertising on competitive media.
  • Broadcast television is cited by more adults as their primary source for local weather, traffic and sports news and their source for breaking news.9
Despite the popularity of some advertisements, the sound volume of advertisements which tends to be higher than that of regular programming has been deemed an extreme annoyance to many. The United States Congress passed a bill on September 30, 2010 called the CALM Act, that requires the FCC to regulate the sound volume of advertisements, and President Barack Obama signed the bill into law on December 15, 2010.

New Media Influences

New media technologies such as DVRs have increased the size of audience viewership as consumers are able to save the shows and watch them at a later time. However, these technologies also allow viewers to skip the commercials, influencing advertisers decisions about paying for ads that may not being viewed. Because of this, Nielsen has updated its methodology for calculating TV ratings, and now measures commercials watched live and via DVR playback as long as it is during a three day period after the original airing date.10 Using Nielsen data and research, they have determined that most viewers do not in fact change channels during commercial breaks.11 The graph below depicts the amount of channel switching and/or room changing during promo pods, or commercial breaks, as explored in an observational research, the “Video Consumer Mapping Study” (VCM), conducted by Nielsen.11 

Cable and Broadcast Advertising

Since the 2008 recession, television advertising in the United States has just recently gotten back on its feet, reaching $59 billion in 2010.12 Although television viewership numbers and television advertising numbers are both up, advertisers continue to choose to invest more and more into Cable. For the first six months of 2011, “Television’s growth was fueled mainly by cable which rose 20%. During Primetime specifically, TV Ad Revenue jumped 7% to $18 Billion with Cable ad revenue escalating 29%.”14 However, despite cable receiving much of the advertising revenue on television, broadcasting networks like NBCUniversal, CBS, Time Warner, Viacom and Disney are taking advantage of rapid growth in online advertising, and have made their content available for online streaming. With its growing popularity and usage, Internet advertising is predicted to surpass print ad spending by 2013, making it even more important that broadcasters adapt to the online shift.12

Ad Revenue by Time Segment





















Media Type 

TV Daypart 

Jan-June 2010 (000)

Jan-June 2011 (000)

% Change


Broadcast TV

Prime Time





Cable TV

Prime Time





Spot TV

Prime Time

















Cable TV






Broadcast TV






Spot TV


















Cable TV

Late Night





Spot TV

Late Night





Broadcast TV

Late Night











Source: CAB analysis of Nielsen AdViews data; Prime M-Sa 8-11p & Su 7-11p; Daytime M-Su 9a-4:30p; Late Night M-Su 11:30p-1am.

From the above graph, key discoveries include:
  • Primetime TV ad revenue increased 7% to $18.6 Billion in the first half of 2011.  Cable’s 29% revenue gains for the first six months propelled the dayparts growth by over a $1 Billion.
  • In Daytime, Cable and Spot TV offset Network TV’s 12% decline. Overall the daypart grew 3% to $8.4 Billion.
  • In Late Night, Cable’s 16% gain drove the overall daypart’s growth by 7% to $2.9 Billion.


  10. Kaczanowska, Agata. Television Broadcasting in the US. Rep. no. 51312. Ibis World Inc, Nov. 2011. Web. 28 Nov. 2011.
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