What Is a Designated Market Area (DMA)?
DMAs Are One of the Defining Factors for a Show's Success or Failure
The acronym DMA is an abbreviation for a designated market area, as used in the media industry. Nielsen Media Research, a leading research firm based in New York City, measures audience viewership that indirectly determines whether or not shows are canceled or extended. Nielsen uses DMAs when compiling their ratings. They then generate Nielsen ratings for television stations across the country.
What Is a DMA?
A DMA is a region or territory where people get the same television and radio options. They are often linked by major metropolitan cities, but in rural areas, can be combined.
Nielsen divides the country into 210 DMAs. These areas represent 210 television media markets.
DMAs are more than just cities. For instance, the Philadelphia DMA encompasses not just the city, but all areas where Philadelphia stations are watched the most. The Philadelphia DMA includes southern New Jersey and most of Delaware.
Because of that, a Philadelphia TV station would want to cover news across the DMA and not just in the city. It would try to sell advertising to companies throughout the area.
Territory Division Determinants
Every county in the U.S. is in a DMA. Some DMAs cover a huge geographical area, like the Salt Lake City DMA, which stretches across the entire state of Utah. Others are geographically small, like the Providence DMA, because of all the nearby New England cities with their own stations.
The deciding factor in determining which DMA Nielsen assigns a county comes down to viewing habits. If more than 50 percent of homes in a county watch Baltimore TV stations, then the county is assigned to the Baltimore DMA. That's true even if the county is geographically closer to another city, like Washington, DC.
Occasionally, Nielsen will shift a county from one DMA to another. Maybe people in an example county suddenly get Washington, DC stations on their cable system and decide they'd rather watch the news from the nation's capital than from Baltimore. Once more than 50 percent of homes watch DC television more than Baltimore TV, Nielsen will move the county into the Washington, DC DMA.
Nielsen publishes an annual list of DMAs by audience size. In 2019, New York was the leading DMA, with Los Angeles coming in second.
DMAs and the Internet
The rise of the Internet and alternatives to traditional television and radio has impacted DMAs. Many people use online streaming services to watch their favorite shows or use paid subscription radio instead of what is available publicly in their DMA.
With growing portions of the audience turning away from the standard communications, particularly millennials, DMAs and Nielson ratings have seen significant changes in their numbers. Currently, Nielson is adapting its ratings systems to account for television streaming and network radio to get a more accurate count, which will impact how advertisers purchase air-time.
Advertising Cost Differential
DMA or media market information is important for businesses and consumers. The size of the DMA and the activity of the audience determines the costs of advertising. For instance, a commercial on a television station in New York City will cost much more than a commercial purchased to air on a station in Lancaster, PA.