Glossary of TV Advertising Terminology: Both Common and Commonly Confused
At Simulmedia, we have an Acronym Rule: team members have to state industry jargon fully before reverting to acronyms. For example, we’ll mention a gross rating point, and only then refer to it by its more familiar “GRP.” This ensures we’re all on the same page. We even named one of our conference rooms after it as a reminder.
Whether it be spelling out customer acquisition cost (CAC) in a team meeting, explaining a media metric on Simulmedia Live, or limiting abbreviations in company-wide emails (except for the occasional “ICYMI,” short for “in case you missed it”), reminding our team to “never assume” promotes mutual understanding and transparency within our company and client/partner relationships.
This rule got us thinking: Knowing TV's advertising terminology and vocabulary can help advertisers assess, target, plan, execute and measure with a lot more confidence. So we’ve compiled a glossary of TV’s most commonly used - and commonly confused - terms to help them navigate important media conversations.
Rating
Definition: Average audience per minute of an entire program (including commercials). Expressed as a percentage of a total target audience exposed to media, regardless of the target audience actually available to be reached.
Example: Let’s say there was a 3-minute program that in minute 1, 2, 3, respectively, had 1000, 1200, and 800 viewers out of a total target size of 100,000. The rating would be (1,000+1,200+800)/3 = 1000 / 100,000 = .01 or 1%.
Share
Definition: The percentage of a target audience exposed to media, relative to the target audience actually available to be reached.
Example: Let’s say only 80,000 target viewers of the 100,000 were actually available to be reached. The share would be calculated (1000+1200+800)/3 = 1,000 / 80,000 = .0125 or 1.25%.
Index
Definition: The relative composition of a target audience watching a specific program or network, as compared to the average audience size in the television universe.
Example: Let’s say you’re targeting W25-54 who have kids and are also cooking enthusiasts. That audience makes up about 7.4% of the total TV viewing universe. If 7.4% of a particular show’s viewers are enthusiasts with kids, then that program would have an index of 100. If 14.8% of the viewers were within that target audience, then the index would be 200.
Impression
Definition: When an advertising message is exposed to a member of a particular audience.
Frequency
Definition: The number of times an advertising message is exposed to someone in an audience.
Reach
Definition: The number of audience members reached regardless of frequency.
CPM (Cost Per Thousand)
Definition: The cost of delivering 1,000 impressions to members of a particular audience.
GRP/TRP (Gross Rating Point/Targeted Ratings Point)
Definition: Gross refers to total impressions, regardless of target, and Target refers to targeted impressions. The latter also can be expressed as targeted GRPs. Calculated by taking impressions divided by the audience universe, multiplied by 100 (impressions /[universe x 100]).
Reach Point
Definition: The number of different households or persons who are exposed at least once to an advertising schedule over a given period of time.Calculated as GRPs divided by frequency; usually expressed as a percentage.
CPP (Cost Per Point)
Definition: Cost of reaching 1% of a target audience based on GRPs, Reach, & Frequency. Calculated as Cost / number of GRPs. Includes duplication because it is based on impressions.
CPRP (Cost Per Reach Point)
Definition: Cost of reaching 1% of a target audience based on audience coverage. Based on reach. Doesn’t include duplication.
Upfront
Definition: The practice of buying and selling national TV advertising time on an annual basis for the October–September broadcast year. With about 80% of TV media transacted in the Upfronts, media sellers get more certainty about their revenue, and ad buyers can negotiate pricing advantages and impressions guarantees, in addition to taking comfort in knowing they won’t be shut out of the market when they need to be on-air.
Remnant
Definition: A legacy term used to describe any ad units that have not been purchased by an advertiser. It’s rare today that a network will even sell inventory defined as “remnant” due to high advertiser demand that leaves most networks able to sell all of their available inventory.
Scatter
Definition: The buying and selling of TV inventory that has not been transacted in the Upfront. Scatter gives ad buyers flexibility to enter the market only when they’re ready, though it can be more expensive than inventory purchased in the Upfront.
Is there something we missed? Email us at marketing@simulmedia.com. We might just add your suggestion to the glossary.