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  • Scott Halpert (VP Ad Products + Business Development)

How Dynamic Ad Insertion in VoD Works



How do you insert ads into your content if you’re streaming video in a VoD environment? The answer is dynamic ad insertion, which lets you serve different ads to different audiences. How does dynamic ad insertion work for VoD? It’s a simple concept that relies on some sophisticated technology.


Quick Takeaways:

  • Dynamic ad insertion enables the insertion of different ads for different users into streaming video content.

  • Dynamic ad insertion uses server-side ad insertion (SSAI) technology to inject ads into existing streaming content.

  • Dynamic ad insertion lets advertisers target personalized ads to specific viewers.

  • Viewers benefit from seeing more relevant ads in VoD programming and experience a “seamless” stream akin to broadcast viewing.

  • Advertisers benefit from a more targeted audience and more efficient ad spending.


What Is Dynamic Ad Insertion?


Advertisers have long been able to insert ads into streaming video content, both live streams and video on demand (VoD). Dynamic Ad Insertion (DAI) expands on that concept by enabling advertisers to insert different ads for different viewers.


Dynamic ad insertion in VOD content.


With the continuing growth of advertising-based video on demand (AVoD) services, advertising has become a critical part of the streaming video landscape. By using DAI, advertisers can target specific types of viewers based on viewer insights and their own campaign goals. DAI even lets OTT services deliver more ads to specific viewers of VOD content or different ads based on the viewing device. It’s all about delivering seamless insertion and personalization of the ad experience for each viewer.

The primary benefit of DAI is that, unlike traditional broadcast advertising, it doesn’t serve the same ads to everybody. DAI allows the microtargeting and mass personalization that viewers demand and that advertisers benefit from. Viewers get ads targeted to their interests and behaviors, while advertisers don’t waste their ad dollars on consumers who have little or no interest in what they’re selling.



How Does Dynamic Ad Insertion in VoD Work?

To deliver microtargeted ads in OTT programming, DAI uses server-side ad insertion (SSAI) technology. Unlike client-side ad insertion (CSAI), which embeds ads at the device and requires two players (an ad player and content player), SSAI intercepts content from the OTT provider and inserts selected ads into the existing stream. This provides a seamless transition between content and advertising and enables the insertion of dynamically selected ads. (in 2020, Pixelate estimated that 40% of streaming ads are delivered via SSAI. Today that number is significantly larger.)


This all works because streaming video assets aren’t usually single files, but rather a flood of small chunks of video. The chunks are sent over the internet from the OTT provider and then reassembled on the viewer’s computer, phone, or media streaming device. A streaming manifest describes the correct sequence for these video chunks, which also plays a key role in dynamic ad insertion.


Dynamically inserting streaming ads with SSAI is a multi-step process that involves several different entities. It looks like this:



How server-side ad insertion works.


  1. The viewer selects a VoD program to watch.

  2. The viewer’s media player sends a request for the VoD program to the OTT service’s content distribution network (CDN). The request includes information about the viewer to enable advertising targeting.

  3. The CDN is configured to use an ad insertion service for its manifests rather than the content originator. It relays the viewer request to the ad insertion service.

  4. The ad insertion service pulls the template manifest, including ad markers, from the content origin server. The ad markers tell the ad insertion service where to insert ads in the program.

  5. The ad insertion service sends a request to the ad decision server. This request includes information about the viewer such as the viewer’s player, the number and length of each ad break, available demographic info, and so on.

  6. The ad decision server uses the provided information to determine what ad(s) to serve for each ad break, then transmits the URLs for those ads to the ad insertion service.

  7. The ad insertion service adds the URLs for the ads to the manifest and sends what is now a complete manifest (content + advertising) to the viewer’s player via the CDN. At this point, every viewer receives a unique manifest.

  8. Playback begins on the viewer’s device.

  9. The viewer sees the ad(s) as inserted into the VoD programming.

  10. The ad insertion service or the viewer’s player generates data about the ad viewership. This data is then transmitted to the ad service for reporting purposes.

How Does a DAI System Decide What Ads to Serve?


One of the key attributes of dynamic ad insertion is the ability to serve personalized ads to individual viewers. It’s this ad personalization that offers value to all parties involved.


How does a DAI system know what ads to serve to what viewers? Ad targeting is part of the overall DAI process, based on information about the viewer provided by the publisher's viewer’s subscription services on their devices. The OTT provider may know that viewers of a specific gender, age group, income level, and location want to watch a given program. That information enables advertisers, to attach highly personalized ads to programming that matches their viewer targets.


Bidding on specific ad slots is handled via programmatic advertising. Programmatic advertising uses machine learning and other technologies to automate ad buying and serve targeted ads to individual viewers. The State of Connected TV/OTT: Ad Supply Trends Report from Pixelate reveals that programmatic video advertising now reaches 72% of U.S. households.


The entire programmatic advertising process involves OTT providers, supply-side platforms (SSPs), demand-side platforms (DSPs), and advertisers. An SSP is an automated service that lets OTT providers sell their ad blocks to multiple DSPs. A DSP is an automated service that lets advertisers place ads with multiple OTTs via their SSPs. The OTT provider deals with one or more SSP, whereas advertisers deal with one or more DSPs.


The OTT provider tells the SSP what ad blocks are available and information about the program content and viewer demographics. The SSP transmits that information to one or more DSPs. The DSPs use that information to match available ad blocks to relevant advertisers, who’ve targeted the audiences that match what the OTT is transmitting. Advertisers can buy based on pre-determined pricing (Programmatic Guaranteed, DealID based) or, depending on the OTT provider, bid on available ad blocks via the DSP. In either case, the DSP will choose one or more advertisers to send to the SSP for consideration of inclusion in the ad break.


The result is that viewers see personally relevant ads seamlessly inserted into their VoD programming. They get an enhanced viewing experience while advertisers reach a targeted audience and get better value from their ad spend. This also benefits OTT providers, who generate greater ad revenues and keep their viewers more engaged during commercial breaks.


Contact us today to learn more about dynamic ad insertion and SSAI.

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