Understanding Ad Rate and Ad Revenue

In the upcoming days, I will post an article that is almost solely math-based. I will show you all examples of my predictions of a returning show's estimated ad rate, and provide the formula and variables behind it. I figured that in order to do that, I must first go over: what exactly are ad rates and ad revenue? To put it simply:

Ad Rate: The price of a 30-second national advertisement during a primetime television series, as set by the network. Whenever a company places a 30-second ad into a commercial break, this is how much it costs. 

Ad RevenueAlthough ad rate is how much money it costs to buy a 30-second spot, ad revenue is how much the network actually makes off of the advertisement.

In the upcoming article, ad rate will be emphasized much more than ad revenue, as it is the factor that I have spent the most time trying to figure out (plus, we have the opportunity to view the exact ad rates when they are publicly released, while ad revenue exact numbers are hiding in the hands of network executives).

There you have it: ad rate and ad revenue presented in their simplest terms. Next up: the mathematics behind my Ad Rate formula, which in turn is adapted from avid ratings follower and occasional TV Ratings Guide commenter Omabin.

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