Realizing New Revenue Streams with
Dynamic Ad Insertion

April 19, 2023



Realizing New Revenue Streams with Dynamic Ad Insertion

by  Luis Cantu, Vecima Content Delivery & Storage 

What if every household – or even every device in every household – was its own unique ad zone for linear TV? We’re accustomed to dynamic internet ads, in which every user and session is unique. Using the same level of personalization and targeting on linear channels would be a game-changer for multiple system operators (MSOs) and telecommunications providers (aka telcos). We’re not there yet, and adoption will take time, but we’re well underway with streaming and dynamic ad insertion (DAI) for linear content. 

The Difference with DAI 

DAI is the ability to deliver a personalized ad within a video stream of live linear programming or on-demand content. The traditional approach to linear TV advertising is largely based on geographic zones. Most of the ad spots are owned by the content provider and filled with national ads from large brands, with a few “avails” left over for the provider to insert their own local advertising content. Location is essentially the only demographic information available in the traditional approach.  

As providers adopt new technologies to stream linear content, every live or on-demand channel session becomes unique. That’s where DAI comes into play as a means of narrowing down zones to provide better targeting for advertisers. 

The Incremental Opportunity 

DAI evolves linear advertising from geography to targeting. With streaming making every session unique, providers can gain more detailed targeting information about subscribers. The more targeted an ad can be, the more a local advertiser will be willing to pay for it, knowing they’ll reach their exact, ideal audience. This also enhances the viewer experience by serving them relevant, targeted ads. For MSOs and telcos, DAI has many layers of advantages: 

  • Higher value for subscriber views – Targeted advertising is more effective and, therefore, increases the value per view. With DAI, you can capture more revenue from the same ads.
  • More channels, more opportunities – Due to the technology investments required to support geographic-based advertising, legacy insertion is typically only supported on channels with high viewership. With streaming, the investment is significantly lower, making “longtail” channels, or those with lower viewership, more justifiable for DAI.
  • Better ad sell-through rate – DAI is programmatic. Avails can be filled through modern ad marketplaces rather than relying solely on direct placements with local advertisers.
  • Monetize additional viewership types – Video on demand (VOD) and DVR avails are rarely monetized in traditional linear ecosystems because many ads lose their value when aired at a later time. With DAI, you can replace outdated ads with timely and targeted ads.
  • Reduce Internet Protocol (IP) TV transcode capital cost – It’s quite costly to transcode different ads for different zones on linear channels. DAI makes it all electronic. The channel only gets transcoded once downstream. 

With all these benefits, DAI stands as an incremental revenue stream to increase the profitability of overall ad insertion. It can help offset and overcome the increasing content costs and subscriber churn that many providers face today.  

Vecima’s MediaScale™ Dynamic Content with TruLive™ solution helps service providers gain control over content by supporting content rights, blackouts, and advertising. By manipulating content at the edge of the network, operators can deliver more efficient, personalized video content and more opportunities to monetize that content with targeted, higher-value ads. 

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