The shift from cable TV to cord-cutting over-the-top (OTT) streaming services has changed the advertising landscape. Now, distributors such as vMVPD companies work hand-in-hand with content providers to create channel packages and deliver them to viewers. Think traditional cable with normal linear channel line-ups, but streaming over the internet. Advertisements within these streams are potentially lucrative, especially if they’re highly targeted.

According to Kyle Gilster, Director of Client Delivery for PDG, however, the first generation of ads in this digital space posed challenges for MVPD providers. “While content providers allowed distributors [vMVPDs] to insert their own dynamic ads on some of the commercial breaks, this only amounted to between 2 and 4 minutes per hour of ad inventory for the distributor,” he said.

As the volume and variety of DAI options grew, however, content providers and distributors began implementing revenue-sharing models that let them work in tandem and make more digital ads available. Given that there are around 16 minutes per hour of commercials, using just 2-4 for DAI leaves 14 minutes of baked-in ads that offer minimal value for content providers and no value for MVPDs.

To help address this issue, providers and distributors used a method known as inventory share. “The goal was to have all 16 minutes of ad inventory in the hour to use DAI,” says Gilster. “To achieve this, content providers entered into agreements with distributors to allow the distributor to insert DAI ads in the remaining 14 minutes, but shared part of the inventory with the DAI ad campaigns that the content provider sold themselves. The scalability of these OTT services were much more conducive to enabling additional ad inventory since most of these services matured in the cloud-native world.”

In practice, this saw vMVPDs sending off ad requests to their ad decisioning service, then splitting the ad decisions between distributor and provider ad campaigns. The challenge? “Both companies must have their campaigns in the same ad decision service for this to work,” says Gilster, “but this creates lots of restrictions. Many companies want to use multiple ad decision services, and some want to completely separate their inventory to better manage different ad sales models.”

To address this challenge, PDG partnered with the vMVPD and the content provider to help create a new commercial break.

Simply put, the goal was to deliver a seamless, dynamic ad break that split ad time between content providers and distributors. This would allow the inclusion of DAI for every ad break instead of relying on baked-ins.

When it came to making it work, however, things got more complicated.

“First, we had to create an agreement with the content provider and key vendors that both companies use — such as the vMVPD’s SSAI vendor, and come to an agreement on design,” says Gilster. “Next, we needed to ensure that the content provider could create triggers that identified which parts of the ad break belong to the vMVPD, and which belonged to the provider.”

These SCTE-35 triggers, or cues, act as a signal to engage ad decisioning and serve up a targeted ad for the specified time. What PDG found, however, is that in many cases a 4-minute ad break might see the first two minutes owned by content providers, minutes 2-3 owned by distributors, and the last minute going back to providers. This created a situation where three ad decisions were required in the span of three minutes. “The way that DAI works and DAI vendors work, it would be extremely hard to keep this back-to-back-to-back break structure while maintaining DAI ads in these three segregated avails,” says Gilster. “It would be tough to provide a seamless experience.”

“What we’ve done to solve this problem is allow the content provider to put specific information in the incoming trigger that says there is a distributor break available at the 2-minute mark that will be 1 minute long. Then, we artificially change what this break looks like and move the distributor part of the break to the end by inserting new triggers. This allows us to handle only two ad decisions and support a more seamless experience. We’ve already launched three channels and have another two launching in the next two months.”

By making the move from a single-source DAI pipeline to multiple SSAI services managed via the vMVPD distributor, inventory increased 10-fold.

Perhaps more importantly, however, was the increased ability of both distributors and content providers to serve up even more targeted ads.

“Decisioning happens per viewer”, notes Gilster. “This means there can be an ad campaign for any viewer, only those shopping for a car, or only those shopping for a car subset, such as a sports car. The result is higher CPMs per ad decision which yields more ad revenue for both the vMVPD and the content providers.”

PDG Consulting’s approach has also helped this major vMVPD make better ad decisions on demand.

“Decisions are made on the fly,” says Gilster. “DAI is done very near to the actual commercial break airing. If you have a lot of concurrency, you don’t want to wait before the break starts — you want to pre-fetch the decision. To accomplish this, we pre-fetch the ad decision for the next commercial break, then wait until we see the trigger to insert those ads.”

The result? More ad inventory choices for distributors, and better use of available ad space for both distributors and content providers while maintaining a great user experience. Combined with data-driven targeting and intelligent ad insertion that reduces the number of decisions required per ad break, PDG helped deliver DAI frameworks that offered the dual benefit of more choice and increased ad revenue.

Gilster puts it simply: “Viewers are going to watch ads, so it’s worth making them more relevant.” Complete control over all 16 minutes of available per-hour ad space combined with more inventory for more targeted ads makes this possible.

Ready to streamline ad insertion, boost inventory and improve ROI? Discover how PDG Consulting can help.

PDG is a team of world-class innovators and technologists delivering streaming media development, dynamic ad insertion, business process optimization, software product and application software development, enterprise cloud and managed services, and end-to-end big data solutions that help drive business growth for clients such as DIRECTV, CBS, Sony Pictures, and 21st Century Fox. The company’s agile team consists of business analysts and executives, engineers, and information technologists who collectively ensure that our clients have the competitive advantage they need to succeed. Have questions about an OTT streaming, DAI, business intelligence or process optimization project? Contact us and let us know how we can help.