Crystal-Clear Programs, Fuzzy Old Commercials

Picture this: You’re kicking back on the couch watching a ball game on your new high-definition TV. The clarity is stunning. You can see every expression on the faces of the crowd, and you can practically read the lips of the players. Then comes the first commercial, and you remember just how lousy TV can look.

That’s because experts estimate that less than 1 percent of all TV ads are produced in the HD format today, a fact that’s hard to ignore if you’re among the 20 percent of American consumers with an HD set. So with all the talk of finding better ways to capture—and keep—viewers’ attention, why are so few ads shot in high definition?

“We spend a great deal of time thinking about media strategies that erase the signals that make people aware of commercials,” said Pete Demas, vp, director at Publicis Groupe’s MediaVest branded entertainment unit Connective Tissue. “Could there be anything more jarring than seeing your beautiful 50-inch HD image slamming into a [standard definition] ad?”

Probably not, agrees Forrester Research principal analyst Josh Bernoff. “What they’re basically saying is, ‘This is a commercial, so you don’t have to watch,'” he says of advertisers not shooting spots in HD.

It’s hard to determine how many ads are now shot in HD. Trade groups and researchers queried don’t collect such data and weren’t aware of any group that does. Anecdotally, the number appears to be very small. A Fox rep says it is now averaging “a couple of HD spots a night.” An ABC rep said the network had aired 425 HD spots between August 2005 and May 2006, or an average of 1.4 spots per day. By comparison, each of the four major networks shows an average of 600 commercials a day, according to Nielsen Monitor-Plus.

Just about all of the prime-time network schedules are now shot in HDTV, as are a growing number of daytime shows and sports telecasts, such as the Super Bowl. Even some late-night shows, such as The Tonight Show with Jay Leno on NBC, are in HD.

Curiously, given the high price of Super Bowl spots (an average $2.4 million per 30 seconds in the 2006 game) and the $1 million or more that most advertisers spend producing their in-game commercials, only 60 percent of this year’s Super Bowl ads were produced in HD, according to ABC. It begs the question: Why would a marketer pay such a high cost of entry and not produce the ads in the same high-quality format as the game itself?

For Pepsi, which aired three spots in the game—none in HD—the answer came down to both cost and narrative considerations. One ad shot in 16 mm film was going for a “grainy feel” that producers thought HD would distort, a company source said. Another featured special effects that would have cost more to shoot in HD, the source added.

Anheuser-Busch, however, produced all 10 of its Super Bowl ads in HD. “We fully believe that the higher-quality viewing experience aids in the retention of the advertising message,” said Marlene Coulis, vp, brand management.

Mark Cuban, who co-founded HDNet, the niche cable network with all-HD programming, sums up the overall lack of HD ads this way: “Agency employees don’t have HD at home. Where you find agencies with HDTV penetration, they push for HD. Where not, not.”

But others argue that the issue is not so black-and-white. Peter Gardiner, chief media officer at Interpublic Group’s Deutsch, says that the medium simply has not reached critical mass. “You have to have the high-def distribution with the viewership to justify the incremental costs. Consumers aren’t sitting around saying, ‘Gee, where are my high-def ads?'”

But some viewers are doing just that, according to focus group studies conducted in March by New York-based research company Big Picture Strategy on behalf of client iNHD, the ad-supported HD cable channel whose investors include Comcast, Cox and Time Warner. According to Jo Holz, vp research, iNHD, one of the top complaints was “how disruptive they find seeing a standard definition ad during [an HD] program.” And it reflects poorly on the marketers, said Holz. “It’s jarring and disappointing. … Viewers say it indicates that the advertiser doesn’t care.”

That said, Holz agrees with Gardiner that HD has not yet achieved critical mass. Still, she argues, today’s HD audience is hugely important to marketers. “These people are opinion leaders and influencers. You want to reach them in the right way.”

Which is why McNeil Consumer Healthcare is producing its Tylenol ads in HD, said company rep Michael Beckerich. The ads reach “leaders in communities and folks that are well-educated, well-connected and powerful driving forces for their friends and family.” But some clients say it’s more complicated than that. As Mitch Oscar, evp, Aegis Group’s Carat Digital, points out, just because 20 million homes have HD, “It doesn’t mean that you have that much penetration for any one network. Economies of scale remain modest.”

While some argue that cost has stunted the growth of HD ad expansion, there’s disagreement on how big or little the cost differential really is. Dennis Bannon, vp/executive producer at Leo Burnett in Chicago, says producing in HD can ratchet budgets up 15 percent to 20 percent. And given that HD spots will only air where there’s HD programming—primarily prime time and sports shows on the major networks—”it’s not worth the extra money.”

David Perry, director of broadcast production at Publicis’ Saatchi & Saatchi New York, disagrees. He says there are many reasons why HD ads haven’t caught on, but argues that cost shouldn’t be one of them. Perry cites a production cost survey by the American Association of Advertising Agencies that concluded the incremental cost for finishing a 35 mm film ad in HD is a modest $10,000. “The increment is so minimal that it shouldn’t be a deterrent for any agency,” he said.

Still, says Perry, HD is not atop the agenda for many clients because they’re busy examining other new options. “People have been seduced by other mediums,” he said. “Television is not the cool medium that it was. So just at a time when TV is at its technological best, it’s run into this competition from the Internet and cell phones and iPods that have taken much of the attention away from it.”

But for some clients, HD ads match their message perfectly, says Dave Kroencke, principal, The Richards Group, which produces HD ads for Patrón tequila. “From a brand messaging standpoint, we couldn’t think of a better compliment than the highest-quality transmission,” said Kroencke.