The Rise of Server-Side Ad Insertion. An interview with Penthera’s Scott Halpert

Scott Halpert, Senior Vice President Product and Partnerships at Penthera is focused on finding video streaming solutions for OTT providers. His company, Penthera, which spans across 36 countries and more than 100 million devices, offers technology to address last-mile streaming issues such as buffering and low video quality. Recently they released a cloud-based product called 2^nd Look that uses Server-Side Ad Insertions to further improve ad serving delivery.

Charlene Weisler: In looking at the full landscape of ad serving, what do you see as the current state for advertisers?

Scott Halpert: Video is widely recognized as the best way for brands to connect with audiences and advertisers want their messages to be presented to the right audiences in a non-jarring way where  image quality is as high as possible. Targeting technology handles the first part, but ad insertion and delivery technologies are responsible for the second part. No advertiser wants their ad to look fuzzy, or worse, causes a video stream to break. With that in mind, the biggest trend we’re seeing that impacts advertisers is leading OTT/streaming publishers shifting away from Client-Side Ad Insertion (CSAI) to Server-Side Ad Insertion (SSAI/DAI) for Video on Demand (VOD) because it provides a premium viewing experience while offering the same level of advertising targeting as CSAI.

Weisler: What is the state of the market for CSAI and SSAI?

Halpert: CSAI is not effective for Live or Linear delivery because of the latency it introduces, and also is subject to interference by ad blockers. For all of these reasons, publishers are moving away from CSAI and adopting SSAI. SSAI delivers a broadcast quality video stream which creates a superior end-user experience. Also, the image quality of the advertising and content closely match each other while latency is all but eliminated. SSAI is capable of supporting VOD, Linear, and Live streaming and provides a centralized communication point between the publisher’s device ecosystem and their ad decisioning stack.

While it’s a far superior option than CSAI, a challenge that SSAI faces is in how ad decisions must be made for VOD delivery. When using SSAI for VOD, all of the ad decisions for the requested stream are made between when the user presses play and the first frame of that video showing up. This fundamentally limits the ability of the publisher's ad infrastructure and programmatic partners to maximize the value of the inventory.

Weisler: What are some of the challenges and opportunities from SSAI/DAI in VOD?

Halpert: The biggest issue is the ad decision timing issue I mentioned earlier. Publishers are telling us that they are seeing these issues in their KPIs, specifically low render rates, which are impacting the value of their inventory. Regarding opportunities, I believe that VOD inventory is the highest value for a publisher. Viewers are “leaning in” and actively choosing what they want to watch. There is a massive opportunity for SSAI vendors to help extract this value for publishers. This is why we developed the 2nd Look product. It empowers publishers to make real-time ad requests with their existing SSAI infrastructure, resulting in higher yield and increased revenue.

Weisler: How much does AI (or will AI) and machine learning play in the decision regarding ad serving in the VOD environment?

Halpert: In the future, more and more ad decisions are going to be made by these algorithmic-based machine learning buying systems. Our goal is to improve how a publisher's inventory looks to these systems in order to drive increased revenue.

Weisler: Tell me about Penthera’s 2nd Look and its solutions in the VOD space.

Halpert: 2nd Look’s core value proposition is that it provides a mechanism to make the ad decisions closer to when ads actually will run instead of at the start of the video. We do this while preserving the best user features of VOD, such as rewinding and fast forwarding through the video. 2nd Look is implemented with the publisher’s existing SSAI vendor, requiring little work on the publisher’s part. We believe that 2^nd Look significantly improves render rates as ads are only inserted just before they will be viewed, makes VOD look more like Linear, allowing budgets to flow across both, reduces timeout issues caused by the existing short timing window to make decisions and works better with programmatic systems across multiple dimensions, enabling more bidders to participate and higher values to be placed on the inventory.

Weisler: Where do you see the advertising landscape in VOD in the next 3 years?

Halpert: Currently, there is a lot of warranted attention on Free Ad-Supported Streaming Television, or FAST channels, such as Pluto, TUBI, and Xumo. They are relatively cost-effective to launch, their advertising insertion processes are done in “real-time,” and they provide publishers, platform operators, and TV manufacturers, who are launching more owned and operated channels, with a view into the content to which people have gravitated. FAST channels drive VOD viewing which leads to the fact that  VOD will continue to be a critical component of the landscape as it delivers increased levels of highly engaged viewers that consume lots of content. As we help fix the monetization challenges associated with VOD, publishers, platforms and TV manufacturers will certainly drive more consumption.

This article first appeared in www.Mediapost.com

Artwork by Charlene Weisler