ABSTRACT

Television advertising has traditionally been purchased on the basis of programme audience measures. These metrics are used both to select the programmes in which to advertise and to negotiate the rates for huge sums of money in advertising spending. While measures of the programme audience are appropriate for marketers considering branded entertainment (i.e., product placement), programme ratings have shortcomings in advertising planning. Chief among them is the discrepancy between measures of the audience with the opportunity to see the programme and measures of the audience with the opportunity to see the programme’s commercial breaks. Advertisers are not primarily concerned with programme audiences but rather with the audience that particular commercials may reach. According to Poltrack (2006), “the relationship between program audiences and commercial audiences was found to be very stable over time and by programme.” If this is the case, established programme audience measures may be effective proxies for the potential commercial audience. As such, media planners and their clients can simply use these metrics to choose programmes in which to place commercials. However, the appropriateness of programme audience measures for such decisions is more tenuous if the relationship between viewers’ opportunities to see programmes and their opportunities to see commercial breaks varies significantly across programmes or within a given episode. Steinberg and Hampp (2007) also report that programme audiences may be approximately 5%–10% higher than potential commercial audiences. If the price charged for advertising is based on the average programmes audience, this discrepancy effectively increases the cost of reaching a given number of viewers.