The State of Video Ad Tech 2021
Are you still seeing the same ads over and over again while watching OTT? That's because streaming advertising technology (ad tech) is still maturing. While many parts of the streaming workflow have made great technical strides in recent years, ad tech has had its share of growing pains. Everyone wants to create a great ad experience, but each workflow requires a lot of troubleshooting, and there's no such thing as a "plug and play," regardless of whether server-side ad insertion (SSAI) or client-side ad insertion (CSAI) is the preferable solution.
When viewers will buy on average two to three subscription streaming services, ad-supported video on demand (AVOD) becomes the business model of choice if your service isn't within the top subscription video-on-demand (SVOD) buys. 2020 saw the arrival of a number of new AVOD services, and a raft of research confirms that consumers prefer free services overall. Ad tech will take center stage in 2021, and the experts I spoke to say there are three areas to watch as it grows: privacy, workflow fragmentation, and scale.
The Privacy Challenge
As the control of personal information tips back to favor the consumer due to regulations and OS/browser changes, many in advertising are worried. "The most fascinating story right now in ad tech is the focus on first-party data, especially as consumers learn more about the practices of the industry and how their data gets shared and passed around," says Tony Brown, chief of staff at Newsy. Much of ad tech has been based on using third-party information that was arbitraged by anyone who had info about viewers. This creates many walled gardens of consumer data, not to mention the questionable practice of allowing companies to profit from consumers' personal data.
Third-party cookies used for retargeting are set to go away in 2022. Unless a media company has a first-party relationship in which a consumer opts in to give it personal information, it will have a hard time deciding if a viewer is looking to buy a car, get his or her clothes cleaner, or shop for a vacation.
"We are having a lot more companies asking for user consent with cookie notifications," says Michelle Abraham, senior research analyst at Kagan. From a video perspective, there are two impacts. One is the ability to target or personalize advertisements, and the second is enabling viewers to control and manage consent to all of the data being stored about them. "For media companies, it's about making sure that they are presenting the viewer with that opt-in and that privacy notice," says Abraham.
The upshot is that viewers will have more control, and technology will need to be designed to meet this requirement. "Privacy is going to be a differentiator going forward," says Louqman Parampath, VP of product management at Roku. So, how do companies work with the new constraints? More on this later, but first, we interrupt this article to discuss frequency.
Universal User and Ad IDs
Keeping ad frequency manageable and making sure there's not too much repetition is an important focus, says David Dworin, VP of advisory services at FreeWheel. This is even more important when viewers watch content over multiple devices. Achieving acceptable frequency and business targets requires a cross-platform measurement that's standardized everywhere to identify both who is being targeted and what they are being targeted with. Let's unpack this: Media companies need to know what they are showing to viewers on all platforms and who those viewers are.
One option is a universal user ID that would allow both advertising and content targeting to individuals based on a single set of information, or ground truth, as opposed to each entity collecting information about users. The current process of deduplication of contacts from multiple third parties results in a lot of wastage and takes valuable time within targeting. Several universal user ID platforms are competing for market share, and we'll be keeping an eye on which one can negotiate the most participation. This takes care of the viewers.
Next up is ad identification. "Universal ad ID is a feature that we introduced in VAST4 to more consistently identify creative assets across systems," says Amit Shetty, senior director of product for the IAB Tech Lab. A universal ad ID lets ad servers identify the content of the ad (whether it's for a car or a detergent, for instance), preventing consistent repetition. "It is also useful in managing high-quality mezzanine creatives [using the ID to figure out if the ad has already been cached and transcoded, even if it came from different sources]. Ad ID is one of the registries whose IDs can be used as a universal ad ID." It would go a long way toward solving the "ad burnout" problem, but adoption has been slow. "We are seeing it pick up with the larger ‘broadcast' publishers and hope this becomes more prevalent as CTV [connected TV] grows and the importance of maintaining higher-quality ad creatives becomes more obvious," says Shetty.
A universal ad ID, like the one being developed by the IAB Tech Lab, would let ad servers identify an ad’s content, which would help improve targeting as well as prevent the same ad from being repeated within an ad pod or too many times during the same show or movie.
Another issue is that the same ad can be sold by a number of ad exchanges. It can be bought as a direct buy in a programmatic auction or be shown by both a content and a cable distributor. Each transaction might buy the same ad, but there is no consistent information showing who bought what.
A universal ad ID could bring the same uniformity to advertising data that a universal user ID would bring to consumer data, and its implementation would hopefully cap the frequency issue across multiple platforms, ad tech vendors, and publishers. Translation: The ad exchange will know it has already shown the car ad that it was about to play for the second, third, or 14th time, whether it's being viewed on one device or several over the course of the evening. The best-case scenario is that we will arrive at universal standards, but we're not there yet.
Viewers will soon have the ability to opt in to being targeted. Their consent is then passed along to the media application. "Typically, the application hosting the video player is responsible to collect and handle the users' consent, which will be used to enable or disable SSAI for the particular customer," says Robert Seeliger, dynamic ad insertion solutions lead and senior project manager for future applications and media at Fraunhofer Fokus.
SSAI can be used regardless of whether viewers have opted in or not. "People who have opted out of any kind of tracking, or don't have a device ID, are only going to get contextually targeted ads," says Jarred Wilichinsky, SVP of global video monetization and operations at ViacomCBS. Since the focus of digital is very narrow targeting, contextual targeting is considered a step backward.
A sample SCTE ad-insertion workflow, courtesy of Unified Streaming
Consumers should expect to be asked for an email, a mobile phone number, or some other piece of information to create that new data relationship. "Sometimes [services will] have a little bit of stuff that's available for free, but they will still require you to log in, even if it's free," says Abraham.
Measurement starts on the client side within SSAI or CSAI. "The IAB impression standards require that all of the measurement beacons [are] initiated client side. One of the challenges in streaming is reconciling IAB requirements for client-side beaconing with server-side ad insertion," says Dworin. Common questions include, "Was the ad seen according to the buy-side ad server (used for payment)?" and "Was the ad seen according to the sell-side ad server (used for billing and, frequently, for campaign pacing)?" While SSAI can measure the same way that CSAI does, advertisers aren't yet comfortable with these metrics, says Magnus Svensson, VP of sales and business development at Eyevinn Technology.
"[The top question for ad buyers is] how do I take my video measurement—done with an audience-based campaign—in streaming services and reconcile it with my TV-style measurement that uses survey and panel data?" says Dworin. "We haven't figured that out in the same way for digital, and so there's still a lot of competing tech and competing tools, and that leads to challenges." Nielsen is working on a cross-platform measurement system called ONE, but it won't be available until 2022.
Here's a typical ad delivery path and how it can break: The media company (seller) has an ad pod to fill and may have direct deals, a private marketplace programmatic deal, or another bid situation in which it wants to place a certain number of ads within the length of its pods. If the ads returned aren't in the right format, that's the first problem. If they don't exactly fit the ad break, that's another problem. In fact, Yuval Fisher, Wurl's SVP of technology, says there are maybe 10–15 different causes for ad breakage. These include bad VAST, creatives that have different durations than stated, Google Ad Manager returning a wrapper that unwraps into nothing, communication issues between vendors, or even a channel surfer clicking through an EPG, initiating multiple ad requests as he or she momentarily hits each channel, then moving on to another channel and leaving the ad with nowhere to go.
"I think in the short term, things are really only going to get more complicated because there are so many different players across the various platforms," says Newsy's Brown, "We're not just trying to serve ads on our owned-and-operated platform or apps, but we're also on other platforms, apps, and terrestrial cable systems as well." While not everyone has Newsy's reach, most ad-supported digital platforms have to deliver to many different ad stacks—Fire TV, Roku, Sling, Peacock, Apple TV, Hulu, AT&T TV NOW, fuboTV, Tubi, YouTube TV, mobile, desktop, gaming devices, and the many flavors of CTV. (Note that, for the purposes of this article, I'm focusing on the live-streaming use case.)
A flowchart from Wurl shows the typical ad breakage points in the ad delivery path.
"SSAI is the de facto standard with all large premium publishers. I've been at Roku now for approximately 6 years, [and] when I started, maybe 80% or 90% of all ads were client-side ad inserted. Now it would be hard to find a big premium publisher who is not doing server-side ad insertion," says Parampath. Simon Westbroek, VP of global sales at Unified Streaming, says most of his company's 150 clients are using SSAI.
"The SSAI solution must be able to derive parameters like encoding settings, bitrate ladder, and cue marker-signaling from the ingest source to configure the SSAI workflow," says Seeliger. And SCTE markers are the signals of choice. "We expect the SCTE markers to be inserted by the encoder, and of course the encoder receives them for the SEI [specific emitter identifier from an individual transmitter] signal or some other ways."
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