How Do Nielsen Ratings Work?

We all know that the number of people who watch a TV show influences its continuation or cancellation. When a show becomes popular with viewers, its ad prices dramatically increase. But how exactly do television network executives and advertisers know how many households are tuning in to price an ad placement? With the Nielsen rating program, stakeholders in the TV industry gather this valuable data and use it to make decisions that affect the future of each show and attract advertisers. Here's how it works.

The Sample Group

Nielsen, a firm that began measuring radio ratings before switching to TV in the 1950s, creates a sample group of about 41,000 households. These homes reflect the overall diversity of the United States, representing an accurate proportion of characteristics such as geographic location, race, gender, and age.

To find their sample, Nielsen selects a county, then specific towns within that county, then specific homes within the designated area. They reach out and ask each of the chosen homes to participate in the program.

The Viewing Data

Each household in the Nielsen sample group receives an electronic device that measures and transmits the viewing data from each television in the home. The family members receive a button that they must push when starting and ending a show.

In addition to the data from these official Nielsen homes, the agency uses paper surveys during the sweeps periods in February, May, July, and November. With this method, they gather mail-in viewing information from thousands of households outside the 56 largest U.S. media markets.

The Results

This convergence of real-time data provides details about how consumers behave during commercials and programs. Advertisers learn which spots get viewed and which drive people to change the channel.

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