In this article written for Online Marketing Conference d3con, our Director of Marketing & Business Development Sebastian Strootmann together with Lasse Nordsiek, Managing Director for the DACH region at Equativ, explore the opportunities of server-side ad insertion in CTV and the successful open alliance between Equativ's SSP and Nowtilus SSAI. Read the original text in German on the d3con website.
In the video sector, the shift from premium content and viewers to the so-called “big screen” has been unstoppable for quite a while. The Connected TV market in the US almost doubled in 2022 compared to 2020. In Germany, 61% of the population has already consumed TV content via CTV in 2022.
On the other hand, advertising spending on classic television is declining and is currently reaching the level of 2014 in the US market. This TV world is hit twice as hard: on the one hand, TV content is consumed less and less by consumers in the classic linear way, on the other hand, it is delivered via digital technologies in the CTV environment with significantly more attractive solutions.
This enables a precise target group address, the technologies of frequency capping, and in the programmatic environment also the automated yield control, which optimizes the monetization results for the content owner within the ad breaks.
But Linear TV is also enjoying renewed popularity thanks to new technologies such as FAST (Free Ad-Supported Streaming TV), which uses the device's Internet connection.
In order to ensure the monetization of digital TV inventory in the SVOD market, content owners often also rely on advertising-based models, giving advertisers access to outstanding premium inventories. Server Side Ad Insertion Technology (SSAI), i.e. server-side-based, dynamic, and personalized advertising delivery, becomes the central unit in the supply chain between advertisers and video content.
"It is important for advertisers that the supply chain within CTV does not take place in a 'black box', but that full transparency must be ensured at all times within the transaction; access to inventory is ultimately decisive in order to exploit maximum revenue potential".
Lasse Nordsiek, Managing Director DACH, Equativ
"As the leading platform for dynamic advertising insertion, we can use the Equativ Ad Stack to seamlessly cover the entire supply chain from the advertiser to the inventory provider, which is particularly exciting from a technical point of view."
Sebastian Strootmann, Director Marketing & Business Development, Nowtilus
With regard to the stakeholders of the video market, the dedicated use of SSAI technology leads to a win-win-win situation. Relevant advertising increases viewer acceptance, advertisers increase conversions among their target audience, while publishers maximize usage and advertising revenue.
Nowtilus' core SSAI functionality within Equativ's programmatic video ad tech stack provides broadcasters and operators with industry-leading live video ad delivery capabilities. Video rights owners, distributors, and aggregators will also have the flexibility to manage direct sales revenue with the ability to reach programmatic media buyers.
The interaction between SSAI and AdStack (Adserver & SSP)
The SSAI technology and the Ad Stack used for monetization enter into a perfect symbiosis, the two essential tech components are married together in the server-side monetization of digital TV inventories. The SSAI technology is primarily responsible for reacting to the respective AdBreak signals (so-called SCTE-35 markers) and delivering a corresponding request to the ad server or SSP with the start and duration of the AdBreak. The yield technology installed within the ad server then compiles the individual advertising streams depending on the available demand, the effective CPM, and the length of the respective individual spots. Next, the ad server returns the ad videos back to SSAI, which are then adapted to the source format by the SSAI technology on the server side ("ad conditioning") and inserted into the content stream. In the case of Addressable TV using HbbTV technology (Hybrid Broadcast Broadband TV), an overlay takes place instead, so-called "Dynamic Ad Substitution". A particular gain in efficiency results from the fact that an advertising video only has to be sent to the SSAI technology once; for all further playouts, the ad-serving technology simply refers to the corresponding advertising video that has already been loaded on the server side. This makes the interaction enormously efficient and resource-saving in terms of server capacities and bandwidths.
Married? Yes, but only temporarily.
An SSAI technology cannot exist without suitable ad serving or SSP technology, and vice versa, at least not in an advertising context. The two technologies are therefore mutually dependent. There is a significant advantage for the content owner (respectively publisher or marketer). If one wants to replace a technology component, e.g. the SSAI or the ad server, the respective technologies can be substituted for another technology with a relatively low expenditure of time and costs. The seamless interaction of both systems and the relatively simple ways to connect those will set another milestone in the sense of the "Open Web" and thus form a counter-model to the rigid, inflexible one-size-fits-all approaches, which are mainly used in walled gardens but are also not uncommon among local providers and ad sales houses. Local providers often combine technology and media that cannot be used independently. On the one hand, there is a risk that further technological developments are only dependent on this one player, and on the other, that certain standards are developed without taking into account the global market.
And who needs SSAI now?
Let's briefly turn to the question of who an SSAI technology in conjunction with a suitable ad stack (ad server and/or SSP) is actually aimed at. This depends on many factors but above all on the factor of how I, as a publisher or content owner, want to organize my ad sales business. Do I want to market the TV inventory exclusively myself, do I want initial self-organized ad sales plus additional ad sales by the technology partner, or do I want to leave the digital TV inventory exclusively in the hands of a third party? In the modular Nowtilus (SSAI) and Equativ (Adserver + SSP) networks, a relatively typical model is self-organized ad sales with an additional marketing option through Equativ. In this case, self-organized ad sales take place as a direct campaign via the ad server (IO-based) or as a direct deal or PMP within the programmatic channel. Equativ supports monetization through its own ad sales resources as part of demand facilitation or as an "Auction Package". In the latter, various digital TV inventories are bundled and marketed centrally via a deal ID. Equativ also offers the possibility to curate one's own inventory as a publisher or ad sales house bundled with other inventories. This is especially interesting for CTV ad sales houses who bring their own inventories but want to benefit from the additional reach within the Equativ universe. Most importantly, they can take advantage of the ability to use additional targeting parameters (e.g., video through-rate, etc.) and charge their own "curation fee," which is basically a sales margin. Another central role is played by control and complete transparency over all marketing-relevant parameters. This applies, for example, to pricing, which can be set via corresponding floor rules, transparency regarding bidding conditions and transaction costs within the programmatic channel, or alternatively the technical CPM in the case of direct bookings. An additional factor that should not be underestimated is data sovereignty. This relates above all to aspects of the storage of physical data or also, for example, the import of the company's own 1st party data, which must be protected against unauthorized third-party use.
Why CTV is revolutionizing the TV market?
Connected TV can be seen as a kind of "fresh start" for publishers and advertisers, as the old rules of linear TV advertising no longer apply in some cases, and completely new approaches to advertising insertion can be taken in terms of position, length, and content, for example. With innovative technologies, needs such as competitive exclusion and frequency capping (setting a maximum number of impressions per viewer) can even be defined across devices. At the same time, a coordinated integration of dynamic ad insertion, ad server, and supply side platform allows the core experience of linear TV advertising to be transferred - namely the seamless transition from content to advertising back to content - without buffering, player crashing or comparable restrictions in the user experience. In addition, constant communication between the technology components involved in the advertising supply chain ensures that the available targeting parameters are passed on and an appropriate spot is played back for the target audience and context.