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

 

Ad Streaming During the Pandemic. A Conversation with Publica’s Ben Antier

The business arena of companies working in ad serving is centered on those featuring end-to-end solutions. How does that impact the business during a pandemic? Ben Antier, Co-Founder & Chief Product Officer for Publica offers some insights into his company’s strategy. Publica, according to Antier, “provides all the modern solutions to run an ad supported streaming service: Real-time Auction decisioning between the largest programmatic buyers on the market, Server-Side Ad insertion, Ad Podding, DMP functionalities, Direct Campaigns Ad-serving, unified analytics between streaming and advertising.” 

Charlene Weisler: Please explain SSAI. It sounds like we are doing it now.

Ben Antier: SSAI – aka server-side ad insertion - is technology that combines a stream of content with a stream of ads. That means if you turn on your TV and flip the channel the first thing the TV will do is fetch a stream of content from over the internet. When a user is streaming a content video there is a place designated for ad breaks. That's where SSAI comes in. SSAI identifies those spots and replaces what was an empty slate with a series of ads that have been sold in real-time for that particular user. 

There has been some discussion lately about publishers failing to work effectively with SSAI, resulting in an inability to effectively pass data back to advertisers and a corresponding diminution of dynamic measurement, personalization and optimization. My opinion is that there is a lot of panic pandering around SSAI. When done appropriately, SSAI is the most efficient way to insert ads into content and it provides all of the measurement capabilities that advertisers might expect to receive. 

Weisler: Tell me about ad podding. How it works and how your company facilitates it.

Antier: Ad podding is the digital version of an ad break. On the traditional web you are going to make an ad request for an ad and you're going to deliver that ad. In TV, there’s always a series of ads, back to back, especially in live environments. Until recently, Ad Pod management in the OTT space was so poorly done that the best Connected TV viewers might see would be an “Ad Break in Progress” message. Even worse, they might see the same ad multiple times and/or a black screen.

Ad Pod management in a live linear context is not trivial. In fact, it is the key to running an Ad-Supported OTT business and it essentially revolves around a few key technical protocols. There's a holistic aspect to ad podding that we help facilitate.  We give publishers the ability to control the ad experience at the ad pod level. We provide all the tools to make sure ads are valid, high quality, unique, and we do all of that in real-time to guarantee an optimal user experience. 

Put more granularly, when we identify an opportunity to insert an ad, we run an auction in real time, under one second, where we call any of the top 15 programmatic buyers on the market. We run an auction and then pick the winning creative, the executions that yield the most revenue for the publisher. That's where pod management kicks in. Once we have the highest priced ads, we want to make sure that they are valid, unique, HD and so on. We reject any invalid, duplicate or competitive ads and pick the next ones up in the corresponding auction. We build the highest yielding ad pods, optimized on a “dollar per second” model. Simply stated, we guarantee the highest price for the publisher, while also guaranteeing an optimal user experience. 

Weisler: What are the major challenges to your part of the business at this time during the pandemic and for the media business in general?

Antier: Less spend is the biggest challenge. Advertisers are cutting back so they're either cancelling campaigns, or reducing the budget for their existing campaigns.  That translates to less revenue across the board.  For the media business in general, it is all fairly similar. If advertisers are spending less, then everything gets more competitive and rates go down. But the biggest challenge is the uncertainty, how the industry will weather the storm. Long term there will be winners and losers like in any industry.  We feel confident that we can mitigate risks for our clients because we run auctions which always find the highest price for any piece of inventory. That’s a powerful tool even in the best of times and especially now.

Weisler: What are the opportunities that you see during and post pandemic for your area of the business and the media business in general?

Antier: For us at Publica, this creates an opportunity to show the value of a solution that delivers the highest potential revenue for publishers. That’s a great opportunity. For the OTT space in general, the increase in consumption will decrease somewhat when shelter in place goes away but it has accelerated the transition from traditional TV content to OTT streaming services.  Overall, the impact will be positive for our side of the business.

For the media business in general this experience has demonstrated two things: First, programmatic is essential because it allows you to take quick action and react quickly to unexpected events whereas the Upfront model has been challenged by the crisis. Programmatic is able to weather the storm much better. And second, when advertisers reopen budgets, more than ever they will want insights into what they are buying and into the outcomes of their ad campaigns.  That means the focus on programmatic and measurement will be even greater. Advertisers are going to want ROI more than ever because if you're going to restart things correctly, you are going to be cautious.  Programmatic and measurement are going to continue to be the things people focus on after this pandemic. 

Weisler: How have your processes / business changed in the past six months? Where do you see it going in the next year?

Antier: We obviously are all working remotely and we have now even hired people remotely without ever seeing them face to face. So that has definitely changed.  But from a day to day operations perspective, things aren’t changing too much. We’ve always collaborated with our clients on Slack since everything is done online.  We feel very lucky to be in an industry that can continue to operate with agility. Of course, conferences have gone away and that has always been a good way for us to build our network.  But we’re innovating and finding new ways of doing that. For the media business in general, I think there's going to be a lot more flexibility in terms of working remotely.  I think we’re also going to see a long-term impact on larger cities, like San Francisco, where I live.

Companies that don't have a healthy business model are going to suffer and some will go out of business. Unfortunately, this means that the industry will continue to consolidate but not in the traditional M&A scheme. I am a strong believer that innovation is usually driven by smaller companies. So the fact that smaller players are going to go out of business over the next few months could potentially slow down innovation.  That’s not a good thing for our industry.

Weisler: What is your advice for advertisers and agencies at this time?

Antier: Don't lose sight of innovation.   Innovate or die......Continue to challenge and raise the bar with partners and technology companies you are working with.  Make sure campaigns are hitting goals, audiences and delivering outcomes. Walled gardens that do that well are out there but also look at publishers capturing audiences in very unique ways. Marketers need to support that. Be demanding and do not put all of your eggs in the same basket. Don’t just buy Facebook inventory. There is a ton of opportunity over the open internet which now includes Connected TV. Sometimes it's better to find niche audiences in niche verticals and double down on that. Continue to test things out. Find what works best for you. Experiment.

Weisler: Can you report on any data that has been collected regarding media usage at this time? I am curious to know if there are any trends that you can ascertain.

Antier: The market is saturated with COVID-19 research but I have not seen anything earth-shattering that I was not expecting. The shift from linear to digital was already happening and has now just been accelerated.  But, again, beyond Facebook there are going to be tons of opportunities to deliver your message.  And through CTV we are going to be able to measure how audiences are interacting with political content from each end of the spectrum. Keep an eye on that. For politicians and marketers alike this presents the opportunity to drive campaigns based on data more than ever.

Weisler: Where would you like to see your company next year at this time?

Antier: We think we’ll be in a good place if we continue to stay focused on innovation, cultivating client partnerships and delivering exceptional business results. Our goal is to be at the center of the ad-supported streaming economy.

This article first appeared in www.Mediapost.com