Falling on Def Ears: Marketers Slow to Embrace HD Ads

Luddites could miss out on as much as $8.2 billion per year

If you own a television and take an interest in big-time sports, chances are you’re intimately familiar with the Geico brand. From October 2010 to September 2011, the insurance provider invested $158.1 million advertising in televised sports, making it the sixth biggest spender in the space. And yet despite the magnitude of Geico’s TV budget, none of its spots was produced in high-def.

Even a casual viewer will recognize that something’s just a bit off with Geico’s parade of Cockney geckos, aggrieved troglodytes and squealing pigs. For one thing, when the ads run in native HD programming, they’re letterboxed, bracketed by a pair of vertical bars. For another, the picture quality isn’t as sharp as the surrounding HD content.

Now, by no means is Geico alone in its adherence to the lesser standard-definition format. Marketers of all stripes continue to balk at producing high-def spots; so much so that the digital media-services company DG estimates that only 16 percent of all TV advertising is aired in HD.

Unfortunately, the HD blind spot could be costing advertisers a fortune in squandered impressions—as much as $8.2 billion per year, according to a new study from DG and the research firm Kantar Media.

After studying return path data culled from some 100,000 DirecTV households, DG and Kantar discovered that viewers are much more likely to stick with an HD spot than an ad shot in vanilla SD. All told, retention for HD spots was 18 percent higher than for standard-def spots, and that lift jumped as high as 28 percent when the ad in question was slotted in the “A” position of the commercial pod.

In the critical prime-time daypart, HD ads delivered a 12 percent lift over their SD counterparts.

The format issue appears to be especially relevant in the beverage and QSR categories, as HD spots for both delivered a 33 percent lift. And there’s a correlation between stickiness and impact; per DG and Kantar’s reckoning, QSR brands that produce their ads in SD risk leaving $895 million in impressions on the table.

“It comes down to wasted value,” said Mike Caprio, svp, DG. “You’re spending millions of dollars on media, millions on creative, hundreds of thousands on production, and then at the point where the customer will see all that work and all that investment … you’re essentially turning them away.”

It’s not as if viewers aren’t aware of the discrepancy. Nearly 50 percent of people surveyed said they could easily discern the difference between HD and standard content.

At present, nearly three-quarters (74 percent) of U.S. TV households have at least one HDTV set—up from just 28 percent in 2008. Approximately 82 percent of the programming on broadcast TV is offered in high-def, while 70 percent of national cable offerings are available in the format.

“The advertising business hasn’t been as progressive as it should be in addressing the issue,” Caprio said. “There has to be a cultural shift, and this [study] is a major step. For the first time we have a quantitative analysis of the true value of what is gained and lost.”

Even so, it may take some time to get the most stubborn hardliners onboard with HD. “One major movie studio absolutely refuses to acknowledge that HD sells more tickets at the box office,” Caprio said. “It’s almost shocking to hear that from someone in that industry.”

Publish date: February 9, 2012 https://dev.adweek.com/tv-video/falling-def-ears-marketers-slow-embrace-hd-ads-138149/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT