Since the beginning of commercial television, advertising has been a key part of broadcasting. Over the years, the technology for inserting ads into programs has developed to the point where there is now a whole technological subsection dedicated to it. Ad tech encompasses not only scheduling and playing commercials but also directing them to their correct destinations on the wide variety of platforms and devices now in use, increasingly with a high degree of personalization.
The growth of the streaming sector and the corresponding increase in the adoption of connected televisions (CTVs) have added to the reach and complexity of ad tech. Among trends identified by Allan Nicholson, senior director of advertising solutions and strategy at Harmonic, is the move by some broadcasters to enable programmatic buy-in—also known as programmatic advertising, using automated, data-driven techniques for buying and selling ad slots—on linear broadcast platforms.
“Some of them are also the broadcasters that are making the transition to become more streaming-focused and they’re adopting streaming ad tech for personalization,“ he said. “The other trend we're seeing is broadcasters enabling service providers to start monetizing services using DAI [dynamic ad insertion]. The way to think of this is as a linear to programmatic [application] for monetization, as opposed to the programmatic to linear trend, which enables linear broadcast.”
More Engagement, Less ‘Ad Fatigue’
In the streaming market, and particularly for live sports, Nicholson said operators are personalizing new ad formats, such as L-shaped double boxes (a form of nonlinear addressable TV advertising), squeeze backs (where the program is minimized to give prominence to the ad) and overlays (nonlinear ad banners, tickers and scrolling text alongside the main program).
“And they're all opting to do this server-side,“ he said. “These new ad formats are really all about increasing ad loads while maintaining new engagement and avoiding ad fatigue.”
The coming together of linear and streamed (digital) platforms—at least in the minds of viewers—is also highlighted by Dan Walsh, senior vice president of product management at Imagine Communications.
Audiences don't distinguish between platforms; they simply expect access to content wherever and however they choose to watch.
Dan Walsh, Imagine Communications
“Broadcasters and streaming providers are under growing pressure to bridge the gap between linear and digital operations,“ he said. “Audiences don't distinguish between platforms; they simply expect access to content wherever and however they choose to watch. But many broadcasters are still managing these environments separately, which creates inefficiencies and limits their ability to fully monetize inventory.
“To address these issues, the industry is shifting toward a unified advertising approach, often referred to as ‘Total TV,’ which focuses less on delivery mechanisms and more on audience value,” Walsh added.
This, he explained, is being driven by automation across ad sales, trafficking and optimization: “That reduces costs, improves yield and frees teams from the manual processes that have long defined traditional ad sales.”
With streamers now delivering linear programming as well as their core services, David Dembowski, chief revenue officer at Operative, said everything is now about a viewing experience, including the ads.
“The reason why streamers chose to use a digital platform is primarily because of impression-based sales or, put another way, addressable offerings,” Dembrowski said. “We have a client that was adamant about break-based ad sales, but recently has gone to impression-based sales. There are a lot of reasons for this, but it is mostly because of targeting and measurement.”
‘Unprecedented Opportunities’
Through the introduction of impression-based sales on what Dembowski describes as “the big screen” approach, TV has become a “full funnel advertising platform.” This, he says, goes from a broad approach—high-profile, big automobile or movie launches—to something based more on buying behavior.
“And it shows what's so exciting about CTV,” he added. “Take the example of Amazon [Prime Video], which was an SVOD streamer, always on-demand, up until about three years ago. Then they signed the relationship with [NFL] “Thursday Night Football.” What they've been able to do is expand the TAM [total addressable marketplace] of advertisers that had never even considered buying the NFL on prior platforms. It's created an unprecedented opportunity for new advertisers to get exposure to an audience that was out of reach for years.“
Paul Davies, head of marketing at DAI technology specialist Yospace, said the company prefers the term “addressability” to personalization.
“The reason is that personalization makes you think of an ad targeted at an individual,” he explained. “What we see is that the true value of CTV/OTT advertising is in measurement. We are able to deliver real-time viewing metrics on a one-to-one addressable level, which means that advertisers going to broadcasters to use their CTV inventory are able to get similar types of metrics to those they’re able to get in other digital channels, such as social media.”
Impact of AI
As with other areas of broadcasting, artificial intelligence is top of mind. Davies said he is hearing “lots of discussion” about it, including the potential for Generative AI to create “truly personalized ad creatives” for each viewer.
“I would say there are legal and technical hurdles to that, which would mean perhaps broadcasters aren't jumping on them as opportunities straightaway,” he observed. “One of the reasons why TV advertising is so popular is because of the premium quality and delivery and the fact that it's considered brand-safe.’
Dan Walsh at Imagine said the use of AI in ad tech is “in its early stages” but is being used to identify and enhance factors that produce good results. “By combining optimization tools with AI capabilities, broadcasters can further refine audience targeting and campaign performance,” he said.
Operative's David Dembowski said AI gives “the chance to accelerate the knowledge, workflows and outcomes” being used. “The application of AI to on-board data has cut times by more than half,” he observed. “It's created efficiencies that are so critical in today's world.”
For instance, Harmonic’s Nicholson said his company uses its "homegrown AI technologies" to help advertisers target audiences based on contextual information contained in frames of video prior to ad breaks. “This means you don't have to use personal identity information and can avoid regulatory issues,” he said.
The relationship between TV and streaming advertising may still not be a totally warm one, but ad tech is at least making it possible for broadcasters to show audiences commercials they might actually want to see or are interested in. Or at least are not driven mad by.
