The first quarter of 2016 was another record-setting quarter for the online advertising industry, bringing in $15.9 billion and clearly outpacing last year’s Q1 $13.2 billion, according to the IAB Internet Advertising Revenue Report. Last year, the industry reached its highest level of investment ever, at more than $50 billion, and if the first quarter results are any indication, 2016 is about to be the biggest year yet for digital ad spending.
Currently, online video advertising only represents around 8% of total digital ad spending, but this figure is on the rise. This year the online advertising spend will exceed $5 billion for the first time. This rate of growth outpaces advertising spend in TV, search, publishing, and most other digital ad formats. Needless to say, the online video industry is booming, and online video advertisements represent an increasingly important source of income for online content publishers.
CONTENT MONETIZATION IS NOT EASY
Today, most video advertisements are inserted client side by using techniques such as VAST or Google IMA.
In this model, advertisement logic is handled completely client side and the viewer makes a call to an adserver to load a pre-, mid- or post-roll together with perhaps overlays or companion ads.
While this approach has merit, there are some significant drawbacks impacting both viewing experience as well as revenue generation:
- Ad blockers
- Generic rather than personalised
It is estimated that more than 20% of PC users have an ad-blocking extension installed in their browser, with this percentage rising substantially higher among young or tech-savvy users. The resulting impact on a content publishers’ revenue stream is substantial.
While it is technically possible to detect the installation of ad blockers and prevent playback of the main content, this typically results in a degraded viewing experience.
This in turn results in lower retention rates, which once again negatively impacts the bottom line.
Another drawback of the current approach is the negative viewing experience caused by buffering. When using client side ad insertion techniques, the advertisement will be loaded separately from the main video content.
What the viewer will experience is a buffering spinner while the advertisement is being loaded and once more before returning to the main video content.
Lastly, depending on the utilised advertisement network, online video advertisements are often similar to TV advertisements and targeted at the general audience for a piece of content rather than at an individual.
This can result in a viewer being forced to watch multiple completely irrelevant advertisements and, in the worst case scenario, the viewer switching to different online content altogether.
The lack of personalisation can result in end-user frustration and service churn.
SERVER-SIDE AD INSERTION TO THE RESCUE
However, help is at hand in the form of server-side ad insertion (SSAI). In a (SSAI) workflow, content gets ingested by a SSAI-enabled streaming server together with ad cues, marking the start or end of an ad break.
The streaming server will process these cues and stitch advertisements in place of the main content, right as it is delivered to the viewer.
With SSAI in MPEG-DASH, an “ad start cue” will result in a new Period element being inserted in to the streams’ MPD manifest, containing a reference to the inserted advertisements, and an “ad end cue” will result in a new Period element being inserted, returning to the main content.
Along with the injected advertisement Period, some SSAI solutions will also inject a VAST file in to the Period’s EventStream or in the EMSG box of individual segments.
This VAST file will be parsed by the video player to allow tracking of ad impressions or to enable overlays, companion ads, making the video clickable, or restricting client behavior such as disabling trick-play.
Using SSAI for online advertising addresses each of the drawbacks associated with the traditional client-side approach as well as offering new areas of efficiency and revenue generation potential.
1. A Solution to Ad blocking
Requests to ad-servers are made server side, before delivering the combined content to the viewer. As a result, advertisements become an integral part of the content stream with ad blockers being unable to differentiate between content and advertisements, making it impossible to prevent advertisements from being displayed.
2. Undisrupted Viewer Experience
With SSAI, viewers no longer experience unnecessary buffering. Advertisements are stitched together with the rest of the content and will be delivered in the same transcoding profiles, resulting in a viewer experience similar to linear TV, a continuous video stream with seamless transitions between content and advertisements.
MPEG-DASH’s xlink remote Period element allows streaming servers to deliver a personalized ad break to every individual viewer, no matter the audience size, without affecting the efficiency of other components in the chain, such as the CDN.
Furthermore, by tracking content consumption, ad impressions, and ad clicks, a feedback loop can be constructed towards the streaming server, ensuring the displayed ads are of maximum relevance to the viewer.
4. All the Advantages of Client-Side Advertisements
Even though advertisements are stitched to the stream at the server side, VAST files can still be delivered along with the advertisement content.
This provides all the advantages of client-side ad insertion, such as clickable ads and disabling of trick play, while ensuring that the display of ad breaks won’t be prevented by ad blockers.
THE NEXT STEP IN SERVER SIDE AD INSERTION, AVAILABLE NOW
Although the above description of SSAI insertion in MPEG-DASH might sound like it is still a long way off, multiple online publishers are testing it right now and will roll it out in production in the first half of 2017. Server-side ad insertion is the future of online content monetization and will solve many of the challenges that the industry is faced with today.
At THEOplayer, we are experts in the development of multiscreen playback solutions in HTML5. Our adaptive video player has full support for both HLS and MPEG-DASH across all major desktop browsers and mobile devices. This is provided fully in HTML5, without the need for plugins, while at the same time providing a world-class viewer experience.
THEOplayer has partners and works closely together with many industry-leading solutions for streaming, QoE, DRM as well as SSAI.
One of these partnerships is with Yospace, an industry leader in server-side ad insertion technology. This partnership ensures that THEOplayer and Yospace SSAI can be used together seamlessly by online publishers such as OTT operators and broadcasters.
Together with Yospace, we now make it possible for content owners to optimally monetize their content across all platforms and devices fully in HTML5, while offering a world class viewer experience.
“Our partnership with THEOplayer represents a perfect marriage between the needs of the broadcaster and viewer. Live streams are monetised in a way that is undisruptive to the experience of watching live television online, and we can finally enjoy consistency across major platforms and devices.”
—David Springall, CTO, Yospace
The industry is constantly pursuing new ways of optimising the viewing experience of subscribers. THEOplayer is a front-runner in providing support for server-side ad insertion in MPEG-DASH, completely in HTML5, across every major platform and device.
Find out how we can help you with multiscreen content monetization - contact us.