• by Dave Zornow , June 25, 2010

High-definition TV has been good to TV manufacturers, program producers and consumers. HD helps sell more high-end TVs to consumers who like the big picture and richer viewing experience. Now new research suggests there might be good HD news for media buyers and sellers, too.

A comprehensive study of commercial viewing to a dozen of the largest network TV advertisers suggests that commercial tuneaway is lower in HD households. Higher audience retention means bigger commercial ratings -- which might translate into future cha-ching for broadcast and cable ad sales executives.

A new Kantar Media study reports that viewers tune away from commercials about half as often on HD channels compared to the standard definition (SD) feed for the same network. Ad-supported HD channels have an average tuneaway of 3.73% of commercial seconds compared to 6.8% for SD viewing. The analysis is based on nearly 124,000 30-second spots for advertisers in the automotive, communications, retail, QSR, insurance and prepared foods categories. October 2009 data from 100,000 set-top boxes in Kantar's DIRECTView sample were used for the analysis.The complete results were presented at the Advertising Research Foundation's AMS 5.0 conference in New York earlier this week.

Broadcast also benefits from HD. High-def broadcast channels have 31% less tuneaway compared to the same commercials on SD channels (2.2% vs. 3.2%). "This may be another measure of engagement," says Leslie Wood, president of Media Trust and a study co-author. "If a person is watching on the HD channel, they care more about their TV experience." The finding could also be a win for set-top-box providers. "Return path data can provide important insights into consumers' digital viewing behavior," says George Shababb, president of Kantar Media Audiences. "The ability to isolate the tuneaway effect of HD versus SD is unique to these data," he says.

Wood notes that it isn't clear if HD makes people spend more time with commercials, or if the household characteristics of HD homes -- such as income, family size, etc. -- differentiate SD and HD commercial viewing. Either way, it's good news. "Greater audience retention and its implied higher commercial rating are a powerful rationale for networks considering adding a HD feed," she says.

Breakthrough research is nice -- but actionable findings are what matters most to media buyers. "These data suggest that HD channels reach a more engaged viewer which can have repercussions for our advertisers," says Kevin Moeller, partner and Insights Director at MediaCom. "If HD programming results in a more engaged viewer, it will encourage media communications planning and buying teams to rethink media plans."

Although these preliminary data suggest an additional payoff to networks' HD investment, one sales veteran is cautious about cashing in.

"I am not wild about centering a sales effort on the potential of this incremental gain," says Harvey Ganot, a partner at New Markets Now and former president of advertising sales at MTV Networks. Ganot says charging more for HD is a double-edged sword: if HD is worth more, does that mean standard definition is worth less? "Advertisers are getting the HD advantage for free now. Why would they want to pay more?" heasks. Logistical issues would also make an HD-only sales effort difficult. "Segmentation and micro-placement of schedules in an HD environment are time-consuming and labo- intensive tasks," Ganot adds.

Higher HD commercial ratings may not justify bigger ad sales rates down the road. But if it helps justify networks' continued investment in high def distribution and technology, it's bound to help broadcast and cable CFOs sleep better at night.