
Digital ad spending has surpassed $210 billion as companies look for ways to make the most of customer moves to over-the-top (OTT) services offering live and on-demand video that operate outside the auspices of traditional cable. Connected TV (CTV) advertising, which focuses on Smart TVs and other devices like Roku or FireTV that stream content to TVs, saw a 49% bump in revenue in 2021 and is expected to more than double over the next few years as programmers and advertisers look for ways to get more ads to more viewers, more quickly.
The ideal delivery framework for this function is dynamic ad insertion (DAI), which makes it possible for enterprises to deliver personalized, targeted ads based on what viewers are currently watching and what they’ve watched in the past. Publicly-available third-party data, meanwhile, helps fill in the blanks about their preferences.
The result? 2023 is shaping up to be a banner year for DAI. In this piece, we’ll take a look at four top trends influencing the market next year — and how companies can make the most of them.
Trend #1: The Cookie Crumbles
The death of cookies is inevitable, but it’s not exactly speedy. While companies like Apple and Mozilla have already blocked cookies, Google recently announced that the best-by date of these technology treats has been pushed back (again) to 2023, giving advertisers more time to keep doing what they’re doing now.
Given that most OTT content doesn’t leverage browsers — with the exception of some streaming video services such as YouTube or Twitch, depending on the device of choice — the cookie crumbling may not seem like a big issue for DAI. In fact, it’s a key trend for 2023.
Here’s why: The end of the cookie coincides with an uptick in personal privacy legislation. Consider the California Consumer Privacy Act (CCPA), which lets users opt out of data tracking. Not only does this include information gleaned from cookies, but also data that comes from their device of choice. For example, simply knowing that a user prefers their iPhone for one type of content and their smart TV for another can help inform programmatic ad buying.
The death of cookies, therefore, is a harbinger of bigger things to come. For programmers and advertisers, the top priority in 2023 is creating a strategy that helps power data collection without violating privacy.
Trend #2: The Marketplace Evolution
Programmatic ad buying has been on the radar for several years as advertisers look for ways to get their content to bidders more easily. 2023 will see a continuation of this trend with the evolution of ad tech. For example, The Trade Desk recently rolled out Open Path, which allows access directly to ad inventory without using a supply-side platform (SSP).
Video-on-demand (VoD) providers have a substantive amount of ad breaks to fill and may not have enough directly-sold ads to close the gap. Marketplace solutions that offer multiple ways to find and purchase ad options could both increase available choices and streamline the purchasing process.
But this is just the beginning. The larger impact of the ongoing marketplace merger is tied to the massive amount of data — and therefore analytic potential — to come out of these frameworks. In much the same way that third-party data tells companies more about what users are watching and what ads might be relevant, data about ad buying can help advertisers better target their content to engage viewers. The use of real-time bidding data, meanwhile, can help them assess current market rates and set strategic bid levels.
Trend #3: The Prestitching Priority
Prestitching has also been on the rise over the past year. Also known as server-side ad insertion (SSAI), it is a way to combat client-side ad blockers. It makes sense: If DAI happens on the client side, browser ad blockers can detect and block ad calls before they happen, frustrating efforts to serve relevant and contextual content.
By moving all ad decisioning to the back end, however, it’s possible to create a prestitched package that doesn’t require any client-side ad calls. Instead, all ads are stitched directly into the feed, or manifest, meaning there are no API calls for ad blockers to detect and refuse. In 2023, prestitching will become a top priority as companies look for ways to leverage personalized content and serve it directly to users. Given the amount of work required to ensure compliance with privacy laws and still obtain actionable viewer data, companies can’t afford to waste it with ads that are never seen; instead, they need solutions that deliver ads as intended anywhere, anytime.
Trend #4: The DAI Democratization
While DAI delivery has primarily focused on OTT streaming TV and video content, this is only the tip of the advertising iceberg.
2023 marks the rise of DAI-for-everything — a more democratized market that doesn’t see DAI as applicable only to a specific class of content. Consider podcasts. Already worth over $13 million, this market is set to break $150 million by the end of the decade, meaning there’s a huge opportunity here for both streaming services that carry podcasts and the advertisers that serve them.
While podcasts may use different mediums — some are audio-only, while some combine audio and video — the message is the same: If companies can effectively target listeners and prestitched podcast content, they can ensure ads are part of the listener experience. Even better? The nature of podcasts is one of specificity: Their non-video nature means that these digital talk-fests often zero in on specific topics. According to Edison Research, podcasts focused on true crime, hidden history, economics, and TED talks all made the top 50 listened-to list in 2021 and 2022. The result is a market that lends itself to DAI — and the companies that get their first will get the pick of the litter.
Ready to take on 2023 trends? PDG Consulting can help. From SSAI for OTT DAI that leverages both first and third-party data for personalized ads to streaming media development services that can help your brand alleviate bottlenecks and leverage in-depth analytics — such as customer viewership trends or performance improvements — PDG Consulting has you covered.
DAI is set to dominate in 2023. Make sure you’re ready with PDG Consulting. Let’s talk.
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