Why Ad Tech Is Becoming Smarter Than Ad Buying
Can you imagine if there were 80 different ways to insert ads into content? While there are parts of the advertising business that seem oversubscribed, there are only a couple of ways to insert ads into a content stream. Server-side ad insertion (SSAI) and client-side ad insertion (CSAI) have been with us for years. Now we have server-guided ad inser- tion (SGAI), which seems like a step in the right direction to unify an approach. Let me explain. In the report The Forrester Wave: Sell-Side Platforms, Q4 2024, Forrester looks at what it considers to be the top 10 sell-side platforms (SSPs) and mentions that more than 80 demand-side platforms (DSPs) connect to every SSP. As a refresher, DSPs are where advertisers go to purchase a place to put their ads. SSPs are where publishers sell their ad space.
How can 80 different DSPs have valid businesses, let alone successful business practices? What did the 81st company say when it decided to develop its business? “None of these 80 other companies are doing this right, so we must enter this business to demonstrate our dominance in the industry.” This sums up the whole problem with the industry: many, many entities trying to get a piece of a not particularly large pie.
So, while the transaction side of the business seems very crowded, ad tech is becoming more and more sensible on the supply side (even if there are too many acronyms on both sides).
What SGAI Is
SGAI is an ad-insertion technique that combines the advantages of CSAI and SSAI. This approach allows for more targeted ads and better technical delivery. Ads start faster, and only the “decisioned” ads are inserted, which means allocating less overhead to fetching ads that won’t be used.
SGAI, in addition to providing better delivery, enables FAST channels to do better targeting. Instead of pre-inserting ads into the content (as with traditional server-side methods), SGAI enables real-time decision making, in which ads are selected based on the viewer’s location, preferences, and behavior. The theory is that streaming services can deliver more relevant ads to each user without buffering.
“This ad insertion scheme is not completely new, but it’s gaining traction across streaming providers,” explains castLabs digital market- ing manager Jean Navarrete in a post on the castLabs blog. “Services like Disney+ have already deployed SGAI on a large scale. SGAI offers enhanced client-side capabilities to tackle challenges in live-feed ad personalization and improve both SVOD and AVOD monetization for OTT.”
Standardizing the Ad-Insertion Process
SGAI is part of an industrywide effort to standardize the ad-insertion process in which the server and client video player share the responsibility of ad insertion. “The approach takes advantage of the client video player buffering segments of the video it is about to play,” says Paul Davies, head of marketing at Yospace. “The video stream includes defined lo- cations called resolution points, where content—like ads—can be inserted.”
These resolution points—HLS interstitials and DASH insertion events—serve as placeholders where advertisements can be inserted. “When the client video player sees an up- coming resolution point in the video buffer, it uses the instructions to get the ads,” Davies continues. “The ads are then inserted into the video buffer at the resolution point, and the player plays the ad, just like any other video segment in its buffer.”
A Sept. 10 blog post by Scott Halpert, Penthera’s SVP of product and partnerships, explains how these two ap- proaches operate in similar ways. “They both utilize two video players, they both require that the publisher’s player infrastructure sup- ports the technology (i.e., new video player in their apps/devices) and they both require sup- port from the ad stitcher being used,” Halpert writes. “For example, an OEM’s older TV/hardware segment will be unlikely to support these technologies. Furthermore, ad stitchers are just now rolling out support for HLSI and none are fully supporting DASHX yet.”
The server creates a manifest to identi- fy when ad breaks should occur. When an ad break is reached, the player requests an ad based on the consumer’s targeting data. “The ad breaks are signaled by the server, the client-side video player handles the personal- ization, ad insertion, and beaconing, with the ready to play ad content provided by the ad- server,” according to an Aug. 8 blog post from THEO Technologies.
“Disney Streaming is one of the first in the industry to adopt SGAI at such a large scale to deliver ads,” notes Amit Rajput, senior princi- pal product manager at Disney Streaming, in a 2023 Medium article.
SSAI vs. SGAI vs. CSAI
The types of ads will vary by player. They can include 15- and 30-second ads, as well as L-bar, side-by-side, picture-in-picture, overlay, and companion ads, according to Bitmovin product marketing manager Adam Massaro. These newer formats can be less disruptive and work well with sports or live content, where you are trying not to distract from the ongo- ing event.
Massaro’s SGAI Explained: The Future of Ad Delivery in Streaming post on the Bitmovin blog has a very detailed table that breaks down the similarities and differences among the three ad-insertion methods. To summarize:
- SSAI stitches ads into a video stream. Since ads are pre-stitched, opportunities to select ads based on the viewer’s behavior are limited.
- With SGAI, the server is responsible for the ad-decisioning process, and the client takes care of stitching the ad in with the content, providing a better user experience
- CSAI is handled by the player, and while some companies prefer this on the measurement side for true measurement, CSAI also can degrade the user experience with buffering or incomplete ad delivery due to ad blockers.
Other SGAI Applications
Both SGAI and CSAI support interactive ads. “SGAI facilitates the caching of content, optimizing performance and reducing latency,” notes Navarrete in the castLabs blog.
The SGAI technique can also be used to insert other types of content, like bumpers, which means there can be a master asset that gets appended, removing the need to create multiple country- or region-specific files customized with a different bumper for each one. “We are also excited about [SGAI’s] uses outside of advertising, allowing us to provide a customized branded experience across a variety of Disney Streaming applications while continuing to utilize and share a common set of assets, services, and manifests,” says Rajput in his Medium article.
It’s great to see the tech side of the house developing better approaches. The SVTA Advertising Working Group has started talking about what is involved in creating industry specifications.
As for those 80-plus DSPs, InStadium Technologies co-founder Charlie Deane says, “They could start to take advantage of this technology by incorporating intelligence into ad delivery. If they don’t, this space is going to be taken over by Google or Facebook with all their ad insertion power coupled with AI. And then it’s game over, DSPs!”
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