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They don't have effect on the content [typically] but television ratings are what networks use to charge advertisers.

The number one show for the 2016-2017 season was The Big Bang Theory [when you exclude sports programming] so CBS can charge advertisers more money for ad space since they know an average of 19 million people watched this past season as opposed to a shows on The CW for example whose highest viewed show was Supergirl seen by an average of 3 million people.

So bottom line, ratings affect whether TV shows remain on the air or not. If a show can't make advertising money for its network, it gets cancelled.

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Q: How do TV ratings affect TV shows?
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