Stitching ad-tech together: Understand TV advertising in the streaming era

The growth of streaming video over the past three years has been meteoric. Conviva’s latest State of Streaming report shows total streaming time has increased 266% over this time frame and has also continued to grow this quarter, up 21% over Q3 2020.  This has thrown the advertising industry into a state of flux as advertisers recalibrate their strategies in the digital era, with the pandemic only adding fuel to the fire (ad impressions and ad attempts were up over 30% Year on Year).

New technology developments in the realm of addressable advertising, driven by actionable data and consumer insights, are becoming vitally important tools for broadcasters and operators of TV networks looking to extract most efficiently and effectively value from their content and from the intimate knowledge they have of their audience.

Advertising meets the internet

Addressable TV (Total Video as defined by SpotX) advertising connects brands with individual consumers across a multitude of internet-based platforms, primarily social media and over-the-top (OTT) streaming services. It brings much-needed boosts to broadcaster’s and operator’s revenue streams by connecting them more closely with their audiences and ensuring the content they deliver is relevant and engaging. And it’s a rapidly growing market; Linear addressable TV advertising spend is forecast to double between 2020 and 2023, according to Statista. As the programmer-consumer relationship quickly evolves in the streaming era, broadcasters and operators can open up a modern TV advertising strategy leveraging new two-way conversations based on first-party high quality data simultaneously ensuring compliance with Privacy Protection regulations.

Addressable TV Advertising complements the legacy Linear TV Advertising one-to-many approach seen in broadcast advertising with targeted one-to-one content strategies, making ads decisioning based on a variety of data including location, socio-demo, lifestyle, viewing habits. Premium TV  inventory and audience insights knowledge are fundamental to a successful addressable TV advertising strategy, assets which programmers and operators already have at their disposal. From live audience numbers to granular insights into multi-device usage and Any Time consumption, broadcasters and operators can develop a rounded picture of what drives their audiences and grabs their attention. They can understand how to drive engagement with them in a way that is not invasive or goes beyond their comfort level.

Adhering to consumer privacy

The growth of streaming brings with it a closer alignment of TV service’s live and Any Time programming with social media and mobile applications. This, in turn, begs a need to balance data collection, privacy, and creating actionable insights. Recent advancements in technologies like big data and machine learning make it feasible to automate the collection of granular user information, meaning services can easily segment their audiences by specific categories and preferences to better inform ad insertion decisions.

This incredibly valuable end-user data enables broadcasters and operators to deliver more advanced content targeting, bringing far greater returns on advertising campaign budgets. However, operators should consider the potential for unwanted data leaks. They must ensure full monetization of their content while simultaneously complying with local and global privacy protection regulations. The EU General Data Protection Regulation (GDPR) law, for example, was effective as of 2018.

CSAI vs. SSAI – or both?

Streaming’s growth has brought two primary ad insertion strategies to the fore of advertisers’ minds: Client-Side Ad Insertion (CSAI) and Server-Side Ad Insertion (SSAI). Both strategies have been around for many years and align with traditional set-top box delivery. Now, streaming has significantly expanded the possibilities for both methods.

CSAI makes ad decision requests and takes resulting actions through the client application and video player. The client locally stores the ads, enabling them to manage the process of switching between primary content and ads themselves. It also supports interactivity within the user interface, making it well suited for gamification in content and additional overlays. It’s a popular choice given there is a lot of existing experience and knowledge in the area.

In SSAI, the decisions of ‘which-ad-runs-when’ and the act of ‘ad stitching’ are performed by components upstream of client applications. Ads have already been inserted by the time the customer receives and processes the stream, so the client plays the stitched stream just as if it did not have ads placed. This makes the transition between content and ads seamless for the viewer and is far more resistant to ad blocker software.

Both CSAI and SSAI offer significant advantages. In an ideal world where money is no object for broadcaster’s budget, they would deploy both models in tandem. CSAI makes sense for some types of monetization specific to each consumer, including interactivity and live statistics overlays. For operators, however, this means losing control of valuable audience data.

From an operational perspective, SSAI is most likely to achieve and maximize ad stitching success, while also providing the expected level of scale through techniques such as ad-decisioning, pre-fetching, creative miss management, and manifest delivery optimizations (DASH Server-Guide Ad Insertion with Patch manifest, HLS Interstitials). CSAI, on the other hand, has seen reduced deployments in recent years in the face of increased ad-blocker usage and a growing desire for broadcast-quality online video. However, it continues to be an effective method for media companies to monetize their content through dynamic ad insertion.

Driving the paradigm shift

Broadcasters and operators must consider the type of content they are producing when deciding on their addressable TV advertising solution. Live programming such as sports and news are markedly different from other types of on-demand content, with timing and spikes in viewership being just a couple of important considerations. For more traditional ad insertion, opportunities remain in the form of live overlays, sponsorships of sports stats, and highlights.

Whether the choice of CSAI, SSAI, or both is made, delivering the best consumer experience should always be the focal driver. Advantages and challenges exist within both models. Deploying them together based on the type of content and infrastructure means broadcasters and operators can deliver the best monetization value to advertisers while ensuring the end-user has an experience that meets the expectations of any current streaming service.