Ratings, Shares, HUTS, and CPM

 

division markerEach of the above factors is important in determining the success of a program or commercial.

RATING - A rating is the percentage of households tuned to a particular program from the total available TV households in a designated area.

In this example there are 500 households tuned to program "A" out of a possible 2,800 (all of the TV households represented in the pie).

By dividing the larger number (2,800) into the smaller (500) we get a percent; in this case 17.86. So the rating of program "A" (rounded off) is 18. Since ratings are in terms of percentages, you don't need to say "percent," just 18. Using the same procedure you can see that the rating for program "B" would be 11.

SHARE - A share is the percentage of TV households with sets turned on that are watching your program. In the case of program "A" you divide 1,600 into 500 and get 31 as the audience share for program "A". The share for program "B" would be 18.75 or 19.

In the above example 1,600 represents the HUTS, or Homes Using Television out of the total TV households in the designated area. In this case HUTS = 57% (1,600 / 2,800).

CPM  - Cost per thousand (not million!). When you are considering cost-effective ways of reaching potential customers it's important to be able to compare the media possibilities.

To determine CPM you divide the cost of advertising by total number of people reached by the advertisement (in thousands) . If a radio commercial costs $100 and reaches 50,000 people your CPM would be $2 (100 / 50,000). Note: you cross off three zeros in the 50,000 because we're figuring cost per thousand.


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