MainConcept – Can codecs improve ad-engagement?
Thomas Kramer, VP Strategy and Business Development, MainConcept
With big players in the industry leading the way, ad supported subscriber growth has turned into a key strategy for content owners and broadcasters, with many exploring this offering to reach users in new markets and grow subscribers. Global AVOD revenue is forecast to reach $70 billion by 2027 and while the concept of ‘free’ content is not new, ad-tech hasn’t kept pace with the pixel race for video quality. While technology limits the quality of ad delivery, broadcasters continue to miss out on the full potential of ad revenue. So, what is the current state of ad technology? And can codecs help broadcasters meet consumer expectations while also improving ad-engagement?
The rise of ad-supported offerings
Consumption habits are changing yet again, and ad-funded services such as FAST, AVOD and ad-supported tiers are rapidly growing in popularity. Over the last year, many big-hitters within the industry have adapted their business models to offer ad-supported services. Netflix has led the way with its ad-supported tier of subscription, enabling users to access its content for less money. Disney+, Max (formerly HBO Max) and others have followed, and rumor has it Amazon Prime Video may join the mix.
With customers increasingly turning towards ad-supported content, ensuring that the ads are impactful for the right reasons continues to be important. Repeated exposure to the same, irrelevant ad can worsen the viewing experience and create negative outcomes for the brand. Passive consumption is fine, providing viewers are kept engaged. One way to do this is to capture viewers’ attention by delivering ads which align closely with their personal interests. Targeted ads are not new news – we are well accustomed to this during our daily scrolls through social media and the internet at large. However, broadcasters are now wanting in on the action, with personalization promising to improve engagement and increase return for advertisers, therefore maximizing the value of ad space.
The importance of codecs within broadcast
Codecs are a critical part of the media supply chain. Video files are of such a large size, that without codecs to compress and decompress files, transmission, storage, and distribution of video as we know it, would be impossible. They also play a vital role in ad insertion, in ensuring that the right ad-content is delivered, without issue, at the right time. With the right codecs, the video compression process can be simplified, leading to a streamlined ad-placement experience, enabling broadcasters to deliver both enhanced and targeted ads.
An increasingly popular method of ad insertion is overlaying the ad over the main content. This type of ad insertion can help keep viewers engaged for longer because the content is not interrupted as is the case with traditional ad-breaks. Ads can be placed over the content in a number of positions. Choosing where you want your ad to be placed, and how it needs to interact with the main video influences which codec is required. In general, newer codecs like HEVC/H.265 and VVC/H.266 are best for flexibility and quality. Tile ad insertion allows for a fixed, defined area of the video to host the ad and is best for HEVC and VVC. Multilayer insertion uses two bitstreams: one to layer content, and one to layer the ad, for which VVC is ideal. Slices create ad space determined on the number of rows being used and is ideal for AVC/H.264.
While ad personalization is possible using traditional ad-insertion techniques with ad-breaks interrupting the content, delivering overlaid ads at scale that are also personalized to users presents a huge technical challenge.
Server-side vs client-side insertion
Where the ad is inserted within the workflow can influence the success of ad campaigns. A pain-point within the provision of ads is whether the ad is seen upon delivery. Ad blockers and legacy devices are both common roadblocks which prevent broadcasters from delivering ads to consumers. Server-side ad insertion can alleviate this pain point.
Client-side insertion is routinely used for ads as it reduces the need to manipulate content on a large scale. It inserts ad content at the point of delivery which avoids video processing complexities. However, some of the largest challenges around the business case for ad-supported content is caused by this practice. Ad blocking technologies can identify the ad and prevent the user from seeing the content, while ad delivery to legacy devices can be hampered through technological barriers. The always-growing number of different consumer devices requires an immense effort for engineering to guarantee a seamless ad experience for all possible viewers.
Although more technologically complex, server-side ad insertion delivers significant benefits to broadcasters and advertisers, allowing them to increase the impact of their ad campaigns. The benefits of server-side insertion are possible due to the way in which the ads are packaged and delivered to the viewer. To deliver server-side ads, video content must be encoded together with the ad. This becomes most challenging when you consider delivering this at scale. This delivery enables the content to bypass ad blockers, ensuring that ad content is displayed correctly for the agreed duration. But beyond the technical benefits of server-side delivery sit creative ones too. Server-side insertion allows delivery of the highest level of ad immersion, enabling advertisers to present immersive, personalized ad content to viewers.
However, the challenge lies in the delivery; personalization creates a huge technical challenge, especially during server-side insertion. As with any other content delivery, the content would need to be encoded, in this case alongside a personalized ad for each user. Historically, codecs have prevented this being done on such a scale, limiting ad revenue opportunities for broadcasters. With codecs like HEVC and VVC, these limitations are eliminated.
Codecs and immersive advertising
To really maximize monetization opportunities, broadcasters need to look at improving customer engagement with ads. This will involve ensuring ads cannot be skipped, ensuring good levels of personalization, as well as finding new ways to deliver them in a more immersive way. One way to achieve this will be through using overlay technology to keep ads in the main video as the main content continues to play.
