Ad Insertion Strategies in the Age of Streaming

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Current market dynamics and the global pandemic have driven the advertising industry into a state of significant disruption. Data-driven targeting and addressable advertising are becoming vital tools for broadcasters, operators, and service providers in ensuring efficient and effective content monetization. 

There is strong evidence to show that consumers are keener to watch more adverts if they are engaging and relevant to them. According to DoubleVerify’s ‘Four fundamental shifts in media and advertising during 2020’ report, 44% of consumers reported trying new brands after seeing a relevant ad, while 69% said they were more likely to look at a relevant ad to the content they are viewing.  

Delivering addressable ads can lead to a hugely increased revenue stream for broadcasters and operators. Advertising needs to support the redefinition of programmer-consumer relationships as part of a holistic strategy to open exciting two-way conversations based on first-party data. 

TV meets the internet
In recent years, we’ve witnessed a fundamental shift in consumer viewing habits towards streaming and video-on-demand content models, all enabled by the internet. For advertisers, this digital evolution offers a ripe opportunity to capitalize on new technology advances, which allow them to connect with their audiences more directly and efficiently than ever before.

Traditional one-to-many approaches to broadcasting are fading away to be replaced by one-to-one content strategies, with content recommendations being made based on individual or household viewing habits. Fundamental to achieving this TV utopia is "addressable advertising." 

The Interactive Advertising Bureau (IAB) (VAB) defines addressable advertising as “the use of technologies to enable advertisers to selectively deliver ads to individual households via cable, satellite, and Internet Protocol Television (IPTV) delivery systems and set-top boxes (STBs).” But what’s driving addressable advertising’s proliferation is the quality of the data at a programmer’s disposal. Programmers own two key ingredients for addressable TV: quality ad inventory and audience insights knowledge. 

From real-time viewership numbers to better insights into multi-device usage and on-demand content consumption, we’re now able to build a complete picture of what makes viewers tick. And, more importantly, how we can better engage with them on terms they are comfortable with. 

With great data comes great responsibility
Ultimately, there is a need for balance between data collection, privacy, and creating actionable insights as TV services start to overlap with and offer programming through social media and mobile applications. And thanks to recent advancements in big data and machine learning, it is now possible to automate the collection of granular information about the user and segment the audience to better inform ad insertion decisions. 

Deeper knowledge of the end-user provides immense value for marketing and advertising services by enabling greater advanced targeting and increasing the value of any advertising campaign. At the same time, audience data constitutes the operator’s key asset and potential area of vulnerability. 

Therefore, security and protection are required against possible leakage to the demand-side, ensuring full monetization while simultaneously requiring compliance with local and global privacy protection regulations. This includes the EU General Data Protection Regulation (GDPR) law, which came into effect in 2018. 

Ad-insertion technologies driving the paradigm shift
The rise of IP streaming has placed a spotlight firmly on two strategies for how ads can be inserted into content: Client-Side Ad Insertion (CSAI) and Server-Side Ad Insertion (SSAI). While both approaches have been possible for traditional set-top box delivery, streaming has opened new possibilities for both methods.

The client application and video player enable ad decision requests and resulting actions in CSAI. An essential consideration of CSAI is that the capabilities of the client application and video player determine how switching between primary content and video ads is handled. Since capabilities vary by player and platform, an effort is required to present a consistent consumer experience across different implementations.

In SSAI, communications for ad decisions and the actual ‘ad stitching’ are performed by components upstream of client applications. By the time the client receives and processes the complete stream, ads have already been inserted, so the client plays the stitched stream just as if it did not have ads placed. 

With significant advantages to both approaches, the ideal scenario is that broadcasters should deploy both SSAI and CSAI if the development and operational costs are within budget. CSAI makes great sense for some types of monetization that are highly specific to each consumer, including interactivity and live statistics overlays. However, for operators, this means losing control of the audience data.

For this reason, from an operational perspective, SSAI is best positioned to maximize ad stitching success and ad impressions through techniques such as ad decisioning, pre-fetching, and creative management. It maximizes the ad inventory potential by enabling programmatic selling of unsold inventory. Because of its centralized insertion, SSAI continues to be the best approach for delivering more standardized experiences and messages in front of large audiences. 

To an extent, the decisions taken over the required approach to ad insertion may boil down to the type of content being produced. Sports, events, and news streams are very different from other content types, given their immediacy and potential for large spikes in audience numbers. SSAI is the best choice for these types of content because services related to SSAI can dynamically scale to accommodate spikes and "burstiness."

There are still opportunities for more traditional ad insertion to take place alongside new forms (live overlays, sponsorships of sports statistics, and highlights). Traditional ad insertion into video streams can easily be performed using SSAI, ensuring a seamless experience for consumers. 

Regardless of the approach taken to ad insertions and placements, the most important factor is the consumer experience. While CSAI and SSAI both have advantages and challenges, deploying them in a combination based on content type and infrastructure provides the greatest number of options for monetization while ensuring that consumers receive the best possible experience.

Olivier Milet

Olivier Milet is Product Director, Advertising and Linear Rights for MediaKind