A new look at HD advertising and the HD television outlets available to advertisers reveals a dramatic difference between national networks and local TV broadcasters in terms of HD adoption.
The "Extreme Reach HD Trends Report Q3 2010" finds "a synchronous pace of adoption" of HD by national television networks and national advertisers, but slower HD adoption by local TV stations and cable outlets than that of the ad community.
"On the local level, advertisers and broadcasters appear to be out of sync," the report said. "Advertisers are creating HD commercials in greater numbers and their adoption of HD is outpacing HD adoption by local TV and cable media outlets."
For example, the report points out that in the third quarter of 2010 a total of 30 percent of ad deliveries made to broadcast networks were in HD. During the same period, of all the ad deliveries made to local TV stations, 8 percent were in HD.
Extreme Reach, which delivers commercials to TV broadcasters and cable companies in the format required, based its conclusions on an extensive look at the use of HD by media outlets and the production of HD commercials by advertisers. To reach its conclusions, the company looked at three areas: HD adoption, defined as the percentage of advertisers creating at least one HD commercial and preparing it for delivery to television outlets; HD creation, the percentage of HD ads created; and HD distribution, the degree of HD adoption based on the number of media outlets that receive HD ads.
The difference between national networks and local outlets in HD adoption was most stark with broadcast TV. A total of 83 percent of key broadcast networks have adopted HD, while just 32 percent of key local TV stations have, the report said. The difference between cable networks and local cable systems was much smaller, 59 percent for the former versus 57 percent for the latter. The report defined HD adoption for cable and broadcast outlets as whether they accept HD commercials.
The report examined five categories of advertising — automotive, retail, political, financial services and entertainment — in terms of its adoption, creation and distribution criteria. When it comes to creations, the report revealed financial services create the highest percentage of commercials in HD (29 percent) versus political ads in HD (8 percent).
According to the report, the lower rate of HD adoption by local television broadcasters is creating an opportunity for advertisers. Advertisers who primarily rely on local TV and cable media may benefit from the HD opportunities that are available in their local media markets. While the number of broadcast and cable HD adopters is still relatively low at the local level, there are opportunities to stand out during commercial breaks by adopting HD in the near-term, the report said.