The television audience is the commodity that stations and networks sell to advertisers. Television audiences are bought and sold and audience research is the currency, if you will, that the industry relies upon to make these transactions. From the television side of the business, the goal is to sell as many ads as possible while at the same time charging as much as advertisers are willing to pay. From the advertiser's perspective, the goal is to buy time in programs whose audience contains as many people as possible with the demographic characteristics most desired by the advertiser. Advertisers want to buy these audiences as efficiently as possible. In order to accomplish this task the industry usually describes audiences and their prices in terms of costs per thousand. This is simply the cost to purchase one or more ads divided by an estimate of the number of people in thousands. For example, if the cost for one advertisement is $300,000 and the program audience estimate is 40,000,000 women, 18-49 years old, then the cost-per-thousand is $300,000/40,000=$7.50. There are 40,000 one thousands in 40,000,000. In this example, an advertiser will spend $7.50 for every 1,000 women 18-49 years old who watches the program in which the ad will be placed. Audience research provides the estimates of the size and characteristics of the audience that the industry buys and sells.

The A. C. Nielsen Company provides the audience estimates to stations, networks, program producers, advertisers and advertising agencies. Employing probability sample survey research methodology, Nielsen identifies which programs people watch and how long they watch them. Printed reports and on-line computer access allow Nielsen's clients to examine a detailed picture of television audiences.

Advertisers use this research information to locate the programs, stations and networks that have large numbers of viewers with demographic characteristics they desire. These characteristics are based upon other market research that indicates the factors like age, sex, income, household size, and geographic location of people who are most likely to purchase and use their products or services. As they identify the significant users and purchasers of their products, advertisers look for television viewers with similar characteristics. These target audiences become the focus of the deals that buyers and sellers make. The audience research data helps identify the number of and characteristics of the audience as well as the efficiency is conducted.

-Guy Lometti