TV Rating System

Television ratings are determined by just 5000 households. This sample represents the television viewing habits over 270,000,000 Americans.

The first commercial radio station, KDKA, went on the air in Pittsburgh, Pennsylvania in 1920. It soon became apparent to American businesses that these voices sent out from broadcast stations across airwaves would be a powerful way to advertise their products. But how would anyone know who or how many people were actually listening to the messages. Advertisers who were used to paying for ad space in newspapers and magazines could get a good idea how many people were seeing their ads by the number of publications printed. So the new medium of radio would not flourish until the radio stations could convince potential advertisers to pay their rates for advertising. But how much could they charge if they didn't know who was listening?

About the same time radio was starting out Arthur Nielsen, Sr. was working as an engineer, testing newly manufactured products to guarantee they performed up to specifications. In 1923, the 26-year old Nielsen left the laboratory and began visiting retail stores in different parts of the country to record the sales of different brands of products. He founded the A.C. Nielsen Company and began the field of market research.

Nielsen was aware of the problem of measuring radio audiences and in 1936 he purchased an experimental machine that was capable of making a minute-by-minute record of when a radio was on and where the dial was set. Nielsen fiddled for several years with this "Audimeter" until 1942 when he started his first Nielsen ratings with the Nielsen Radio Index.

But it is impractical to place a measuring device in every home in America. Nielsen had to rely on a randomly selected sample of American homes to compile his figures. He began with a national sample of 800 homes to represent all radio listeners. Radio stations could now set dependable rates upon which potential advertisers could rely. And radio programs that did not attract enough ratings would be in peril on the radio schedule.

Shortly after Nielsen placed his rating system in operation, television appeared on the scene. Television held the potential to be by far the greatest advertising vehicle ever seen by business. At first, advertisers sponsored entire shows and relied on product sales to measure success. But as television programming matured, so too, did the need for sophisticated audience measuring.

Nielsen Media Research developed TV set meters and employed diaries that were distributed to sample homes. In 1973, Nielsen introduced a Storage Instantaneous Audimeter that automatically recorded minute-by-minute data for channel selected, time of day, and duration of tuning. All the information from the sample Nielsen homes was fed by phone line to a central processing bank and for the first time daily national ratings reports were available.

As audience measurement became more sophisticated, the television programmers followed. Television shows were developed not just for their entertainment value but to attract specific segments of the audience. There were programs aimed at teenagers, special shows for women, others targeted at older audiences. Eventually, with the advent of cable, entire networks would be created for specific audiences. All because programmers know who is watching when and how much.

Television ratings begin with the sample. The viewing habits of only about 5000 households (about 13,000 people) are used to represent 270 million Americans. The sampling home is recruited for two years and the sample is staggered so about 300 homes enter and leave each month. Sampling technique is constantly refined so the sample of 5000 best reflects the composition of America as determined by the United States Census and other government organizations. The sampling is so sophisticated that each People Meter represents about 20,000 people. From that small sample comes out television ratings.

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