Despite the annual holiday push to sell cars and electronics, the number of ads sent out in native high definition showed a very slight decline from 14% in the third quarter to 13% in the fourth quarter, according to Extreme Reach's quarterly study of the ads sent over its network.
The results were disappointing because several industry executives interviewed in late 2010 had expected the number of HD ads to jump in the fourth quarter as companies stepped up their marketing efforts during the holidays.
The study once again highlighted the lack of progress that has been made in moving to HD, even though more than three-fifths of all homes now have HD sets, and raised concerns about the competitiveness of local broadcasters, many of whom remain unable to take HD ads.
The proportion of the local broadcasters able to accept HD ads over the Extreme Reach ad delivery network increased slightly in the fourth quarter to 34%, up from 32% in the third quarter. But stations still lagged behind local cable, which often competes directly for the same ads, where 58% of all systems could accept HD ads, and national cable channels, where 59% were HD capable. About 83% of the national broadcast networks could take HD ads.
The number of HD ads on local broadcast also showed a slight decline to 7% from 8% in the third quarter while the national broadcasters increased the proportion of HD ads to 32% in the fourth quarter, up from 30%, and cable networks showed a significant bounce from 23% in the third quarter to 27%. Local cable held steady at about 5% of ads in native HD.
The report also highlighted many of the inconsistencies between regular programming and advertising in terms of the way ads are formatted and their audio quality.
The Extreme Reach HD Advertising Trends Report also found that only 15% of all HD ads offers 5.1 surround sound even though that is widely available in primetime programing and that advertisers are adopting different approaches for the formatting of HD ads when they are aired on SD feeds. About 69% are using 4:3 center cut formats and 39% adopting letter box formats.
There was some good news. In addition to the growing number of HD ads on national broadcast and cable channels, the report also found that the number of automotive and retail ads in HD surged. Adoption of HD by automotive advertisers hit 29%, up from 20% in the third quarter, and retail also jumped, from 29% in the third quarter to 34% in the fourth.
The results were based on a sample of 142,000 SD and HD commercial deliveries completed in the fourth quarter and involved over 7,500 brands, affiliates and broadcast destinations using the Extreme Reach ad delivery network.