"On TV And Video" is a column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Sorosh Tavakoli, senior vice president of ad tech at Ooyala.
In search of solutions to overcome video ad monetization challenges, including device fragmentation, ad blocking and user experience fails, many are bullish about the benefits of ad stitching, also known as server-side ad insertion (SSAI).
But is ad stitching a silver bullet that publishers and advertisers can rely on to meet all their ad delivery needs?
I would argue that while it would be nice to have a one-size-fits-all solution for ad monetization and user experience challenges, it’s just not that simple. The client-side vs. server-side ad insertion debate is multifaceted and warrants careful examination. Marketers should consider the type of content being delivered, the delivery method and their requirements for ad engagement capabilities and measurement.
How Stitching Got Its Start
Ad stitching first gained a foothold in the industry when device fragmentation began in earnest. At the time, cable TV, set-top boxes, game consoles, mobile and other nascent offerings lacked client-side capabilities, so developers on those platforms relied on stitching to circumvent the problem. In other instances, server-side insertion was the only available option, as was the case with the old Apple TV.
Stitching is well suited to address some issues, but certainly not all. The crux of the problem is that most current ad technologies, including programmatic trading, most measurement, including viewability, interactivity and clickability, are largely built on the client side and aren’t supported by server-side ad insertion.
When an ad is stitched on the server side, developers must also implement client-side code in order to add current ad technologies, increasing complexity and maintenance. The recently released VAST 4 standard addresses some of these challenges but far from all.
Another significant challenge with ad stitching is that it prevents publishers from serving popular ad formats. For example, stitching doesn’t work with VPAID, a format that makes up more than 50% of video pre-rolls served in Europe, and even more in other regions, including the US. The inability to serve VPAID, interactive and other types of ads can result in significant lost advertising revenue. Some tech vendors will claim that popular ad formats can indeed be served using server-side insertion. However, the reality is that VPAID is a complex beast on its own. Combining client- and server-side technologies to achieve this neither simplifies nor improves the situation.
Far too often, marketers will express initial interest in implementing SSAI, only to back away once they’ve more fully understood its technical and customer-facing implications. As a result, SSAI implementation remains fairly limited.
The Caveat With Client-Side Insertion
Conversely, client-side ad insertion (CSAI) can not address all ad-serving challenges either.
In particular, CSAI is not well suited to the unforgiving nature of live broadcasts, a very important consideration for publishers serving highly coveted sports or news programming. Live and simulcast can be challenging for CSAI because the technology works by dynamically fetching an ad in the milliseconds after a user hits play, creating a brief moment between call and response.
This latency can contribute to errors in frame accuracy and cause an ad to be served too late or too early. Server-side ad insertion, by contrast, perfectly “stitches” the ad and the video into a single piece of content.
When To Use CSAI Or SSAI
Ad stitching is the best solution for immature platforms where CSAI isn’t supported and for live, simulcast and linear programming. SSAI can deliver the consistent quality of user experience with live feeds and help avoid viewer drop-offs because its single-stream feed eliminates pauses between content and ads. If advertisers insist on clickable ads or viewability measurement, those capabilities can be added on the client side. Some can live without those capabilities and others are willing to put in the hours to make it work and give their clients more measurement and interactivity.
While it’s much touted as the solution du jour to thwart ad blocking, ad stitching is not the only answer to the thorny problem. Client-side technologies can also circumvent ad blockers, using proxies to do so, with documented results. For example, between December 2014 and June 2015, five major European premium publishers using CSAI-based anti-ad blocking functionality consistently unlocked more than 90 million previously blocked ad impressions per month. As a result, these publishers realized more than $1 million of additional – or previously lost – revenue monthly.
The vast majority of advertising technology today needed for monetization and buying decisions is built and designed on the client side. Support for measurement, user tracking and many popular ad formats are lost with ad stitching, eliminating the means to provide a more personalized experience for the user and more targeted buy for the advertiser. Publishers and advertisers that want those capabilities, and all desktop devices, are best off using client-side ad insertion as the default.
The Jury Is Still Out
Ad insertion technology has evolved significantly in the past three years, providing increasingly better options to help publishers more effectively monetize content and deliver an improved user experience – on both the client or server side.
The immediate future will continue to include both technologies, but as we look over a longer horizon, I believe the jury is still out as to how the majority of ads will be inserted. Until we have that silver bullet, publishers and advertisers need to weigh their options carefully.