Continued HD Ad Growth Seen as Key to Keeping TV on Top of Ad Heap - Broadcasting & Cable

Continued HD Ad Growth Seen as Key to Keeping TV on Top of Ad Heap

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A whitepaper put together by technology and service company
SpotGenie Partners predicts television will continue to dominate the
advertising media mix for years to come, despite those who believe digital
advertising is on the swift road to supplant it.

"People have been predicting the end of television,
particularly television ads, since the first website went up," the whitepaper states.
"The facts, however, show that television and television advertising are not
only surviving in the new media age, they are thriving."

The report also predicts that any growth in online ad spending
over the next few years will not come at the expense of television. "In fact,
TV is the one medium that complements social media," the report posits. "New
outlets are increasing TV viewership. Television's staying power is the sheer
supremacy of the viewing experience. TV impresses and motivates its audience
and ensures brand recall. With its mass reach and now the emergence of high-definition
to further enhance and entertain, television remains the medium of choice to
influence consumers and drive purchasing decisions."

The whitepaper will certainly be music to the ears of
broadcast and cable TV sales executives who keep hearing how marketers are
looking to pull more money out of TV and move it into online and mobile
platforms.

The folks at SpotGenie can't be disappointed either, given
their interest in seeing TV advertising stay healthy. Its business involves the
digital distribution of HD television and radio spots for its advertiser
clients and agencies.

But the whitepaper it put together is based on data it
collected from a large pool of sources -- all cited in the report -- as well as
from its own expertise in the area of commercial distribution.

Speaking of SpotGenie's wheelhouse, the gist of the whitepaper's
conclusion that TV advertising will continue to thrive is based largely on the
continuing emergence of high-definition television. As the remaining TV station
affiliates transition to hi-def capability, the cost of producing commercials
in hi-def continues to drop, and as more consumers buy HDTV sets, more
advertisers are going to produce their commercials in hi-def, and TV viewers should
also respond to those commercials more emphatically.

"HDTV provides a quality no computer screen can come close
to matching," the report says, acknowledging, however, that adoption had been
slow on the part of advertisers. "That has just recently begun to change, and
the absorption of HD in the field of advertising is growing at a rapid pace."

Production and post-production costs for shooting
commercials in HD have dropped significantly over the past few years and are
now competitive with shooting a commercial on standard video, the report says. The
costs associated with shooting video in high-definition have in fact come down
enough that high school kids are shooting and editing in HD, the report adds.

However, the transition is still in the old-school phase as
only 30%-40% of advertisers are taking full advantage of high-definition, the
report states.

"Most HD viewers have seen a commercial that looks cut off
at the sides or has black bars at the sides and above and below the picture,"
the reports says. "This is a standard definition ad running on a high-definition
channel."

But SpotGenie's report, stressing the comparative low cost
of production and distribution of HD commercials also says, "HD ads deliver
better audience retention, brand image and more value for the buy. Technology
is leveling the playing field and making it possible for advertisers everywhere
to take advantage of the impact of HD advertising. HD is no longer like your
Sunday china, but can be utilized every day."

The whitepaper cites data from an ExactTarget 2012 Channel
Preference Study, which asks consumers which types of advertising influenced
them to buy a product or service in the past 12 months. A TV commercial was
listed by 53% of the respondents overall. Demographically, TV ads were named by
59% of teens age 15-17, 51% of adults 18-24, 59% of adults 25-34, 57% of adults
35-44, 59% of adults 45-54, 40% of adults 55-64 and 45% of adults 65-plus.
Those were the highest percentages in all age groups except for the two oldest
-- 55-64 and 65-plus -- where a newspaper ad edge out TV commercials.

Newspaper and magazine ads battled it out for second across
the other demo groups, with radio down on the list, below website ads.

The report also states that online and mobile programming
are elevating TV as a social medium. "Conversations once confined to the living
room or water cooler are now taking place on Internet chat rooms, connecting
viewers everywhere," it states. "Fans of shows discuss episodes, predict future
plots and share opinions as the show is broadcast. The social TV phenomenon is
providing entertainment and advertising professionals with an immediate
feedback loop and a new way to understand viewers' preferences."

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