How are Commercial Rates calculated?

Audience share is calculated by firms such as Neilsen. Depending on the projected reach (share of audience) of any given show, the price is calculated by the network. After purchasing the time slot and running the commercial on the program, the Media Department of the Advertising Agency then compares the projected reach (share) with the actual audience reach (via Neilsen, etc.) and, as agents of the sponsor, is either satisfied or negotiates "make goods", depending on the power of the Agency, which is determined by the amount of money they spend in total for all of their Clients with the network (i.e. their clout). Networks have often been screwed by "make goods" when expensive shows (like the Super Bowl) don't deliver.
 
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