Ratings and TV Advertising Sales
Understanding Rating Points and Other Key Terms in Advertising Media
Knowing television advertising lingo enables an objective analysis of advertising sales proposals. Here's a guide to basic terms for effective advertising on TV.
A first-time advertiser who has just heard a TV advertising sales pitch can easily wind up with a brain swirling on overload trying to sort through a jumble of jargon. Here’s a quick primer of basic TV advertising terms and what they mean.
Ratings
Many advertisers and viewers think of ratings simply as a measure of a particular show’s popularity. That’s only the surface of a critical element in advertising. Ratings are expressed in points, and it’s true that the more rating points a show posts the more viewers it has. The actual meaning to an advertiser is much more important. Each rating point is one percent of the total TV audience in the market. For example, if there are 100,000 potential TV viewers in a market, one rating point means that 1,000 of them were watching. The more rating points a station delivers for a TV spot, the more people are exposed to its offer.
Gross Rating Point
GRPs measure the total exposure a spot receives. If a spot runs in a show that has a 7 rating, then another show with a 10 rating, followed by another that has a 9 rating, the spot has accumulated 26 GRPs. That doesn’t mean that 26 percent of the potential total viewership has seen it, because some viewers will have seen it each time. That’s why many advertisers feel they need at least 300 GRPs to give their entire target segment an opportunity to see their message. More is better, and some advertisers prefer schedules with 500 to 700 GRPs to make certain their message is seen, and seen often.
Share
Obviously, not all potential viewers are watching TV all the time. It’s useful to measure a show’s popularity in terms of its proportion of all viewers watching TV at the time. For example, if a show has 32 share, that means it has nearly a third of all the viewers who are watching TV at that time.
Frequency
Repetition is one of the foundations of advertising. A rule of thumb is that it takes at least five to seven repetitions of a spot for a viewer to recall the message and, ideally, act on it through purchasing behavior. In TV ad speak, frequency denotes the average number of times a household or person saw the spot in a specific period of time. Look for a schedule that features the highest frequency possible for the cost.
Reach
This measure indicates the unduplicated number of households or individuals who were exposed to a spot during the schedule, usually expressed as a percentage. If the schedule shows a reach of 74, for example, nearly three-quarters of all potential viewers were exposed to the spot. The higher the reach, the more of the entire audience the spot has touched.
Cost Per Point and Cost Per Thousand
These are straightforward ways to quantify how much viewership a spot gets for the dollars spent airing it. These measures allow comparisons of stations' advertising prices to make most efficient use of budgets. Cost per point is the cost for each rating point purchased. Cost per thousand, abbreviated as CPM, reflects the advertising cost per thousand viewers exposed to a spot.
These measures are also applicable to demographic target segments to help businesses focus their dollars for more effective advertising.
When buying TV advertising, look for schedules with the highest frequency and reach at the lowest cost in your target demographic.
Understanding ratings and other key terms, buying advertising wisely, and using classic techniques to create effective spots are the most critical elements of using TV advertising successfully.
