Dynamic ad insertion: A win-win-win proposition?

It’s no exaggeration to say that Dynamic Ad Insertion (DAI), has seen a genuine evolution over the last few years. From a concept that was initially viewed as an unnecessarily technical integration challenge, through to today’s burgeoning DAI market, there have been many bumps in the road to get to where we are today. However, with increasingly broad industry adoption taking hold, the technology continues to evolve.

Alasdair Pearmund, Head of Addressable at Wavemaker told IBC 365 that DAI is indeed something of a golden boy at the moment: “Dynamic creative solutions are acutely aware of the shift in available technology over the recent years across OTT and Linear TV, and the facilitation to run personalised content through these new broadcaster technologies, (being further driven by Netflix’s recent announcement of introducing an ad-supported subscription model). This has pushed the development of the existing dynamic content production into the video space to allow for the mass-personalisation of video content at scale. And at a fraction of the cost and time of traditional creative production.

• Watch the webinar Creating a personalised viewing experience

“In short,” continues Pearmund, “DAI allows for the combination of the unique brand storytelling capabilities of TV advertising with tailored messaging and programmatic targeting. This will unleash new possibilities for brands seeking smart new ways of deploying digital budgets. It can also achieve exceptional performance, increased return on investment with highly scalable data-driven TV, VOD and OTT advertising.”

Personalisation is key

The core driver of DAI adoption today is undoubtedly personalisation, allowing platform operators to develop new content streams as well as improve monetisation of individual viewers, thanks to the broad preferential datasets that power DAI.

Johan Bolin, CTO at Agile Content, believes that understanding viewer preferences is vital: “Understanding the audience is key for broadcasters and OTT providers who want to get the full benefits of dynamic ad insertion (DAI) as a tool for marrying the habits of viewers with the most relevant advertising content out there. Due to their technical legacy, shifting to a viewer-centric perspective is new for broadcasters who previously were not able to have a direct relationship with the viewers.

“Dynamic Ad Insertion is a win-win-win proposition: greater loyalty; more revenues per subscriber; and new ad spaces to monetise.” - Ahmed Swidan, Ateme

“DAI directly benefits broadcasters running live OTT, live-to-VOD, and time-shift TV services who require a solution capable of inserting ads directly into the content stream, with glitch-free transitions between programs and adverts. The use of frame-accurate segmentation allows an exact and seamless transition between content and ad frames.

“Having a solution that supports all http formats – DASH, HLS as well as Microsoft Smooth Streaming – is key to fully capitalising on DAI across all screens. This benefits broadcasters that need to monetise live simulcasts natively across the widest range of connected devices.”

Technology stack questions

While the theoretical values of personalisation driving increased monetisation and localisation improving reach and maximising content seem almost too good to be true, there are challenges in several levels for operators to overcome.

Ahmed Swidan, Director of Personalised TV Solutions at Ateme is enthusiastic about DAI, but also mindful of the technical challenges. “Dynamic Ad Insertion is a win-win-win proposition: greater loyalty (and therefore lower churn); more revenues per subscriber; and new ad spaces to monetise (for example in VOD content). The challenge is that DAI needs some technical integration effort to add it to the operator’s architecture. Operators also need to have the necessary rights to monetise from content owners.”

• Find out more Ateme talk monetisation and personalisation

Another key moment in the market has become apparent only recently, as the big VOD players increasingly turn back to advertising in general, after years of looking at a subscription-only model. Recent comments by Netflix that ads would be featuring in the mix in the coming years, the launch of a lower-priced HBOMax tier with ads, and similar plans afoot at Disney+, with an ad-funded channel due for launch later in 2022.

This volte-face is partly due to subscriber growth stagnation, and also due to the considerable value still in the TV advertising market. Alasdair Pearmund believes personalisation offers advertisers several key benefits: “Whilst some would argue the CPMs for linear and personalised TV are greater than other channels, the benefits can massively outweigh the costs. Not only does it create a halo effect on other marketing channels, but it also heavily improves brand perception, retention, and delivers the highest effective ROI.”

Standardisation is still a challenge

Interestingly, while there is a clear trend in terms of increasing adoption of DAI, there is still significant fragmentation in the market, not least on a regional level, but also from a standardisation perspective.

One example of this is Comcast Cable’s recent launch of a US-national linear addressable advertising solution for US-based customers and technology partners, which leverages SCTE 224 to trigger linear addressable ads using richer linear metadata - improved automation and more granular targeting all in one. Comcast Cable has dubbed this cloud-based system Linear Rights Metadata Management (LRM), which can also be used to manage display preferences to maximise monetisation and implement/enforce any advertising rules and restrictions, including any frequency restrictions in targeting multiple ad pods in specific timeframes.

Across the pond in France, Bouygues Telecom, Realytics and Smart, launched TVMOTIK earlier in the year, a technology solution that the partners claim will allow TV channels to extract the most value from their addressable TV inventories. The central plank of this strategy (apart from the STB-to programmatic inventory stack) is to improve standardisation and provide consistency - the platform conforms to AF2M/SNPTV standards, according to the companies.

On a not dissimilar strategic note, Roku has announced a beta program for dynamic linear ad insertion (DLA), aiming to increase linear addressability by targeting ads to live TV pods. The technology is highly likely to be based around Nielsen’s advanced video advertising business, which Roku acquired last year. Part of the strategic direction from Roku here was down to aligning scale, direct consumer relationships, the ad tech stack and programmatic relationships - a deck that needed to come together in order to make DAI a realistic prospect.

Free vs premium? The jury’s still out

As Johan Bolin points out, DAI can make free ad-supported TV a viable option, very much validating the customer-facing Roku model: “A new way of maximising the DAI value is to create a FAST channel service, which allows for the creation of niche TV channels, enabling advertising to be targeted toward a highly segmented and well-defined audience, which significantly increases the value of the ad inventory. FAST channels can also drive reach and provide a user base to convert to subscription customers.”

Certainly in the media market of 2022, DAI seems very much alive and well. With increased personalisation very much the clarion call of the industry (and arguably the consumer too), capturing and managing the complex datasets in order to deliver on that promise, as well as increasing the reach of DAI and addressable solutions in general seems to be a given.

While technical challenges remain for some, the level of consolidation and increasing standardisation in the industry points to a more unified, less challenging implementation process in the future.