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Report: HD Ad Adoption Grows but Hits Only 17%

The number of ads in high definition grew to 17% in the first quarter of 2011 from 13% in the fourth quarter of 2010 but continued to lag significantly behind the number of homes with HD sets, which are now in well over three fifths of all households, according to a new report from Extreme Reach, a provider of advertising management and distribution tools.

The newest data found once again that local markets lagged behind national broadcast and cable networks and that smaller local markets were the worst performers. About 42% of local broadcast and cable operations were able to accept HD ads, compared to 71% among national programmers.

The report also found that "near universal" ability to accept HD ads in the ABC, CBS, NBC and Fox affiliates in large markets, with all of these network affiliates in New York City, Los Angeles and Chicago now able to take HD ads.

"The issue of local coverage appears to be the most prevalent across smaller stations in smaller markets," the report concluded.

While 91% of the respondents to the Extreme Reach survey believed that HD ads improve brand performance and another 76% believed that HD helps give advertisers a competitive advantage, the report also cited a number of hurdles that continue to limit the number of HD ads being aired in their native resolution.

About 35% of the respondents to the survey noted that getting the ads into the right format was a problem that limited the number of HD ads being sent out; another 53% cited the fact that many outlets won't accept HD ads as a reason for not producing or sending out the ads in HD.

The higher price of HD was also regularly cited, with 35% noting that HD production costs were a "significant hurdle" and 41% calling distribution costs a "significant hurdle."

The data on the number of HD ads being delivered was based on 124,000 ads sent over the Extreme Reach network in the first quarter of 2011; the survey data relating to hurdles facing brands trying to send out HD ads was based on 160 respondents at 145 ad agencies, advertisers and production companies.