By Eric Gallier, vice president of video solutions at Harmonic
A renaissance is underway in the world of targeted advertising. Historically, targeted ads in the video environment were limited to an audience’s zip code, primarily due to the fact that ads were distributed via multicast, which delivers the same video stream to many viewers. But unicast delivery (i.e., one-to-one video stream delivery) and recent AI innovations are now enabling viewers to receive individually targeted ads at scale. Rapid technology evolutions in targeted advertising are empowering video service providers to redefine viewer engagement and boost their revenue. Let’s take a deeper look.
Boosting Revenue and Viewer Engagement with Targeted Advertising
Targeted advertising provides a massive opportunity for video service providers to enhance viewer engagement and unlock new revenue streams. As ads become more granular, the inventory is worth significantly more. CPM rates have traditionally been about $15 for legacy TV inventory. With individually addressable TV ads, low-value inventory will increase to a CPM of $20, with high-value inventory such as live sports content fetching up to $50.
The predictive capabilities of AI technology play a critical role in enabling advertisers to deliver tailored messages to specific demographics. The more relevant an ad is to the audience, the more it will resonate, thereby driving higher engagement rates and improved ROI.
With AI-driven targeted advertising, video service providers also benefit from granular tracking, enabling them to gain insight into who is actually watching the ads, how long are they watching for, whether they are muting the TV, and more. This data is extremely valuable to advertisers, giving them confidence that delivering individually addressable ads is worth the investment.
Key Requirements in a Targeted Ad Solution
There are several key capabilities video service providers should look for in a targeted advertising solution. Deploying server-side ad insertion (SSAI) technology will enable advertisers to insert personalized ads into the video stream. With SSAI, video content and ads are bonded together in one video stream; therefore, the ads can’t be blocked. The entire process is seamless, ensuring a consistent viewing experience. Dynamic ad insertion (DAI) is also critical, enabling ads to be tailored to individual viewers. Using AI technologies, DAI automatically optimizes ads for viewers, allowing the best ROI. Offering custom content to each viewer is essential for offering a differentiated service offering and attracting subscribers.
In addition, the targeted ad solution must be scalable to ensure an uninterrupted viewing experience for millions of concurrent viewers, which is especially important during premiere sports events.
Next Evolutions for Targeted Advertising
Recent technology enhancements are rapidly elevating targeted advertising. Dynamic brand insertion is one of the latest advancements in the targeted ad space. Leveraging AI algorithms, video service providers can seamlessly integrate branded content into video. For example, placing a logo for a popular soft drink on an in-scene beverage cooler. With dynamic brand insertion, the advertising is seamlessly blended into the video scene, providing a non-intrusive and engaging advertising experience and eliminating the need to go to commercial break. The ad becomes a subtle element of the video content itself.
Another recent advertising innovation the video space is double-box displays that allow viewers to watch live shows or events with the ad running simultaneously on the screen. Aside from opening up new revenue streams for video service providers, this type of advertising minimizes disruptions for viewers, keeping their focus on the content and boosting their satisfaction.
Transform Streaming Experiences with Targeted Advertising
Driven by technology advancements, including AI, targeted advertising is evolving. By embracing the latest targeted advertising innovations, video service providers can drive viewer engagement and boost profitability. However, video service providers need a targeted ad solution that is scalable, easy to use and ensures a flawless viewing experience. Solutions such as Harmonic’s VOS360 Ad is transforming targeted advertising by providing video service providers with a single platform for AI-powered targeted advertising with a seamless viewing experience, and optimized monetization.