What Is a Designated Market Area?
Definition & Examples of a Designated Market Area
A designated market area is a region where Nielsen measures the local television viewership. Advertisers, agencies, media owners, and broadcasters each use information about the designated market area in which they do business.
Find out how designated market areas are determined and what they are used for.
What Is a Designated Market Area?
A designated market area (DMA) is a geographic region where Nielsen, the ratings company, analyzes and quantifies how television is viewed.
DMAs describe particular locations or regions where people get the same television and radio options. Nielsen uses designated market areas when compiling their ratings. They generate Nielsen ratings for television stations across the country, as they've done since 1950. These ratings give insight into which programs are being watched as well as the demographics of the audience.
- Alternate names: DMA region, media market, broadcast market, television market area
How Designated Market Areas Work
Nielsen divides the country into 210 DMAs. These areas represent 210 television media markets.
Every county in the country is in a designated market area. Frequently, designated market areas are tied to particular cities, and they sometimes incorporate the surrounding metro area, too. In other places, the designated market area is quite large and encompasses more than one city.
For example, the New York City designated market area is huge, covering about 7 million homes. Other market areas cover multiple cities and even cross state lines, such as the Washington, D.C.-Hagerstown DMA, which covers about 2 million homes in both Maryland and the District of Columbia. The smallest DMA is Glendive, in Montana, which covers just 3,600 homes.
A location may be in one designated market area and still receive broadcasts from another market area if they're close geographically, but the market areas themselves do not overlap.
Occasionally, Nielsen will shift a county from one DMA to another. Maybe people in one county suddenly get a certain market's stations on their cable system and decide they'd rather watch the news from that broadcaster instead. Once more than half of homes watch that area's programming, Nielsen will move the county into it.
Nielsen uses designated market areas to generate Nielsen ratings for television stations across the country. These ratings give insight into which programs are being watched as well as the demographics of the audience.
Media owners use this information to know which programs are performing the best, and make programming schedule decisions accordingly. Advertisers, in turn, may target the best-performing content for their ads in order to reach more viewers, or may target other content based on demographics they're trying to reach.
Nielsen also publishes other information, such as top 10 lists of popular TV programs, video games, and video on demand, on a weekly basis.
More Than Just Television
The rise of the Internet and alternatives to traditional television and radio has affected designated market areas. Many people use online streaming services such as Netflix to watch their favorite shows, and listen to paid subscription radio instead of what is available publicly over the airwaves.
With these changes, Nielsen has had to make changes, too, to create accurate ratings and estimates and provide value for those who use their services. They expanded their measurements to include DVR-recorded television as well as TV watched on mobile or tablet devices. They added on-demand video and streaming services, too. They also measure out-of-home viewership—television that's watched in waiting rooms, airport lounges, and sports bars.
Nielsen adapted its ratings systems to take these new modes into account. Proprietary measuring tools pick up audio codes embedded in the content, then transmit data securely to be compiled into ratings. Nielsen then provides those ratings to broadcasters, advertisers, and other users.
DMAs and Advertising Cost
Designated market area information is important for businesses and consumers. The size of the DMA and the activity of the audience determine 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, Pennsylvania. The New York City market is much bigger, so ads there will reach many more people.
As another example: the Philadelphia designated market area encompasses not just the city, but all areas where Philadelphia stations are watched the most. That includes parts of New Jersey and much of Delaware. Therefore, a Philadelphia TV news station would benefit by covering news across the entire designated market area, not just in the city. It can sell advertising to companies located throughout the market area as well.
- A designated market area is a region where the ratings company Nielsen measures the local television viewership.
- Designated market areas are often tied to major cities, but in some places cover more than one city.
- Broadcasters use designated market areas to determine their programming.
- Advertisers use designated market areas when buying airtime.