Ad spending in the video advertising market is projected to reach $191.3 billion in 2024 and surpass that by 2025. By 2028, mobile alone will account for that amount of spend.
In fact, each year projects to outspend the previous one with an annual CAGR of 6%, reaching over $240 billion by 2028.
The United States market volume alone is projected to reach nearly $85 billion.
With so many resources being pumped into video advertising, operational considerations can have massive ramifications for revenue.
Being able to deliver the right ad at the right time to the right device is going to be the focus of any digital broadcaster or media-driven video company that employs an advertising video on demand (AVOD) monetization model, especially since flourishing in the video advertising landscape is becoming more challenging than ever. Some of the challenges advertisers are concerned about are:
- Platform Complexity: The ad delivery ecosystem is only becoming more complex as new monetization methods emerge. Publishers and broadcasters looking to implement, optimize, or even overhaul their video advertising might find the effort required to be daunting. Typically, the ad tech industry requires multiple 3rd party partners to deliver ads from the advertiser to the publisher.
- Ad Blocking: Even though AVOD adoption is growing, users are growing increasingly frustrated with the inundation of ads they must endure to access video content.
- Ad Quality: Burgeoning video advertising improvements have made it possible for this to be a reality for any advertiser or content provider. Users are not only demanding high-quality, relevant ads; they’re expecting them.
- 3rd Party Cookie Deprecation: As 3rd party cookies are phased out, advertisers’ ability to target their ads will need to make critical adjustments, as programmatic advertising technology is an integral part of the targeting and segmentation process.
Google has already begun building alternative tracking and targeting methods. Many DSPs, SSPs and player solutions are also taking separate approaches to generating viewer profiles. In addition to Google’s suggested Privacy Sandbox approach, companies such as The Trade Desk’s Unified ID 2.0, LiveRamp’s RampID and dozens more are also making adjustments, however, this dramatically increases complexity.
- OTT Ad Delivery: Streaming services are moving toward connected TV (CTV) advertising while increasing subscription costs. Simultaneously, linear TV ad spend and viewership is declining. For instance, Amazon Prime announced it will begin showing ads in 2024, and more platforms will likely follow suit.
- Ad Fraud: It’s becoming easier to manipulate ad traffic in order to inflate metrics. Specifically, ad spoofers impersonate legitimate publishers or advertisers to trick ad exchanges and demand-side platforms (DSP) into serving ads through SSAI.
- Privacy Regulations: Marketers may encounter new governmental regulations that elicit stricter guidelines imposed by the digital platforms they utilize.
These regulations, such as GDPR and COOPA, will include enhanced data security protocols, limitations on user targeting, regional standardization, and increased penalties for brands that violate regulations.
Overcoming these challenges will depend on how ad delivery mechanisms like CSAI and SSAI are employed. In some cases, it makes sense to adopt a hybrid approach where CSAI and SSAI are both used within a single stream.
What is SSAI?
Server Side Ad Insertion (SSAI) refers to stitching video ads directly into video content prior to being delivered to a user’s device.
This can be done in a few different ways. Ads can be prestitched and delivered as one singular piece of content, or prefetched ads can be stored on a server awaiting requests for delivery. Prefetched ads drastically reduce latency and load times since they’re already preloaded for delivery.
This process allows for a continuous, uninterrupted streaming experience since video ads are seamlessly stitched into the video content prior to delivery. Frame rate, bitrate, and even audio levels are matched to the content. In many ways, it’s a similar process as advertising on linear TV.
However, SSAI still provides personalized ads through dynamic ad insertion (DAI), bid requests, and a programmatic ad infrastructure that’s activated in the milliseconds it takes for a user to request content and the content provider to deliver it.
How SSAI Boosts Ad Monetization
SSAI is on the minds of broadcasters and advertisers more than ever as it solves several overarching problems such as:
- 3rd party cookie deprecation
- Ad blocking
- Personalization
- Laggy, incongruous streams
There’s no trick to it either. SSAI ensures greater ad fill rates since deliverability and scalability are less of a concern than with CSAI solutions.
The downside, of course, is that it’s more expensive to implement. However, if implemented properly, there’s no limit to the ROI.
SSAI provides a streamlined and seamless viewing experience that is reminiscent of traditional TV advertising. Its ability to limit ad blockers’ effectiveness and deliver consistent quality across devices makes it an attractive option for many streaming services.
With the rise of short form vertical videos, SSAI is becoming increasingly popular especially on social media platforms. These ads are brief and attention-grabbing, making them well-suited for capturing the attention of viewers in a short amount of time.
As for live streaming platforms, live streaming ads are becoming increasingly popular. These ads are integrated seamlessly into live streams, providing advertisers with an opportunity to reach engaged audiences in real-time.
Delivery
Since ads are stitched directly into the video stream, the viewing experience is much more seamless and continuous.
All of the heavy lifting when it comes to displaying the video ads is done by the server, not the player, so the ads are prefetched and stored on the server prior to delivery.
Compatibility
SSAI overcomes issues of deliverability by adapting to various screen sizes and devices on the server level, prior to delivery.
Ad blocking
Since the ads are prestitched, seamless ad integration makes it more difficult for ad blockers to detect ads since there are less interruptions and pauses in the content.
Personalization
One of the biggest fears of sunsetting 3rd party cookies is overcoming the issue of ad personalization. Without tracking user behavior through cookies, how could advertisers execute targeting with accuracy? The answer is contextual targeting. This boosts affinity targeting by stitching ads into contextually relevant content.
Video platforms also solve this problem by passing on custom macros to ad servers for campaign management, regardless of compatibility.
Personalized video ads leverage data on viewer preferences, behavior, and demographics to deliver highly targeted and relevant content. These ads are tailored to the individual viewer, increasing engagement and driving conversion rates.
AI Integrations
Artificial Intelligence (AI) algorithms have the ability to process extensive datasets on viewer behavior, preferences, and demographics, enabling the delivery of highly customized video ads tailored to individual viewers. These ads have the capability to dynamically adapt elements such as messaging, imagery, and calls-to-action in accordance with the viewer’s interests and previous interactions.
AI-powered DCO generate and optimize ad creatives (e.g. the 30 second video ad). This enables advertisers to deliver personalized ad experiences that resonate with each viewer, leading to higher engagement and conversion rates. AI video production tools automate the creation of video ads by generating content, editing footage, and adding visual effects using machine learning algorithms.
Scalability
SSAI is easier to scale than CSAI, especially for larger events with broad audiences.
With marquee events like sports matches or election coverage, broadcasters need to prepare for large spikes in traffic. These spikes can translate into millions more ads that need to be delivered than usual.
By implementing a scalable SSAI solution, you can scale up and capitalize millions of simultaneous viewers without missing any insertion opportunities. Seamless scaling (both up and down) will minimize strain on systems and keep operations running as smooth as possible.
Linear Streaming
Pre-stitched ad content delivered via SSAI means less disruptions, higher ad deliverability, and higher quality ads. Viewers are willing to accept ads as part of AVOD models, especially if they’re personalized, relevant, and seamlessly incorporated into video content.
What Are The Challenges of SSAI?
SSAI has limitations in ad campaign control, flexibility, and cost.
Personalization
Contextual targeting may not be as reliable an indicator of user behavior as third-party cookie tracking, especially within niche industries or local markets.
Since ads are stitched at the server level, opportunities for leveraging user behavior and device data are extremely limited.
Flexibility
Real-time ad control. Because ads are prefetched by the ad server, they can’t be adjusted in the moment based on current session data. So if a user doesn’t engage a particular ad, neither that ad creative nor its frequency can be adjusted until the next viewing session.
Prefetching ads means that they can’t be adjusted in real-time. Consequently, if a user doesn’t engage with an ad, there’s no way to adjust ad frequency or tailoring to a more custom experience. This results in users being spoon fed the same handful of ads regardless of relevance.
Analytics
Measuring ad performance is a bit more complicated with SSAI since the data is stored externally. This leads to inaccuracies or greater costs in procuring and analyzing data.
What is CSAI?
Client-side ad insertion (CSAI) relies on the video player on a viewer’s device to stitch ads into content. This provides total control and flexibility in terms of ad personalization since data is being collected both from the video and from the user’s device.
Ad markers are placed within a video stream, and when a viewer reaches those specific points, the video player requests an ad from a server. Relying on first-party data as well as data collected from the content itself, relevant ads are returned to the viewer in real-time.
How CSAI Boosts Ad Monetization
Ad Personalization
CSAI allows for more granular targeting than SSAI as it can target the viewer based on actual demographic elements such as geographic location and user behavior. This is especially effective for niche industries operating in local markets. Targeting becomes much more effective when advertisers can reach viewers down to the zip code.
One of CSAI’s significant advantages is its ability to tailor ads to individual viewers. By making use of real-time data and user behavior during the stream, CSAI can deliver personalized ads, which enhances the relevance of the ad and the engagement with it.
Analytics
CSAI allows users to maintain total control and flexibility over performance measurement since the ad delivery is done at the device level. And since data is procured from the device, it’s generally more accurate than SSAI-enabled ad delivery systems.
Further, client-side players offer a breadth of options when it comes to ad formats, media files, and interactive elements.
Delivery
Live broadcasters still regard CSAI as the standard for streaming live events since ad breaks are less predictable than with VOD, making it more difficult to pre-stitch ads. By delivering video ads separately to a user’s device ahead of time, CSAI essentially captures the value that SSAI provides through a variation of pre-stitching. Broadcasters may find more success instructing the client’s device to play ads that are already pre-loaded, maximizing ad fill rates.
Cost Effectiveness
CSAI is less expensive and complex to set up than SSAI due to the tighter integration between the content and video ads. In many cases, these costs need to be subtracted from CPM payouts.
What Are The Challenges of Monetizing with CSAI?
CSAI is typically seen as the default for VOD where the client’s device sends a request to the ad server when an ad break is detected. In a perfect world, this would be a seamless process where relevant ads are returned promptly. However, this isn’t always the case.
Often enough, errors occur due to timeouts, errors, poor connection, blank responses and HTTP errors. This leads to reduced ad fill which hurts the bottom line.
Ad Blocking
One of the biggest challenges for CSAI is ad blocking. In fact, over a quarter of all video viewers in the US have ad blocking software installed on their devices. This reduces ad fill rates on desktop, mobile, and web environments.
CSAI is vulnerable to ad blocking software since the video needs to pause to request an ad. These gaps in the content are much easier for ad blockers to detect.
Ad Quality
Some of the drawbacks of real-time ad delivery are buffering, latency, and video quality. Mid-roll ads need to load in real-time and CSAI is subject to high network latency shifts in video quality due to changes in the codec, resolution, and bitrate.
Each time an ad is delivered, the video needs to pause so that the programmatic ad process can occur, which leaves the stream vulnerable to longer load times and lower quality.
Furthermore, as the player size increases, video quality can decrease.
Device Compatibility
Not all devices are created equal and CSAI exposes the vulnerabilities of lower performance.
Everything from ad quality and size to deliverability, even the ability to collect data is contingent on the user’s device. Ads delivered via CSAI need to account for potential disparity in user devices that could lead to an inconsistent ad experience.
Verdict: SSAI Wins
When it comes to ad monetization, CSAI and SSAI can both be effective.
However, given the current video advertising landscape and the technological changes that are slated to take place, SSAI has the most potential for ad monetization.
In fact, with so many resources being injected into improving ad operational efficiency, it’s abundantly clear that SSAI is the most lucrative path toward video ad monetization.
And there are several reasons why:
- SSAI delivers a seamless viewing experience with contextually relevant ads
- Ad blockers are significantly less effective
- Seamless video streams to advertising streaming transitions
- Video is consistent across all devices and screens, allowing for cross-device monetization
- Customized ad experienced
- Standard ad cues for Live & VOD delivery
JWP is leading the charge when it comes to SSAI implementation for broadcasters, publishers, advertisers, and content providers in all industries.
With JWP, SSAI integration is easy, cost-efficient, and frictionless.
Talk to an expert today and see how you can start maximizing ROAS with SSAI.