Guest Comment: Why Dynamic Ad Insertion is set to place broadcasters at the top of the podium

Paul Davies, manager of communications and marketing at Yospace

As a summer full of major sporting events gets underway, including Copa América Centenario, Euro2016 and the Summer Games in Rio, we stand to witness what will undoubtedly prove to be a very significant time in the evolution of live simulcast and, in turn, Dynamic Ad Insertion (DAI), writes Paul Davies, manager of communications and marketing at Yospace.

Over the last few years there’s been an exponential growth of online audiences through a succession of major sports events, including the Winter Games, FIFA World Cup and Rugby World Cup. On the one hand, viewers have demonstrated an appetite for streaming live channels online, especially when they’re not in front of their TV, as will be the case with many daytime matches during Euro2016. On the other, broadcasters are able to offer more live content online than on the TV. For example, Australian broadcaster Network Ten set up six live channels for its Winter Olympics coverage that were exclusive to its online platform, tenplay. Another example is TV3 in Ireland, who were able to stream all 48 matches of the Rugby World Cup last year.

There is a separation emerging between linear television and live simulcast. If a viewer is at home with access to the main TV they will watch the match on it, but if they don’t have access to the TV or the match they want to watch isn’t on then they’re perfectly happy to watch online. There’s been a lot of talk of simulcast replacing linear, but there’s a lot of evidence now to show that’s not the case; the two forms complement each other.

This places broadcasters in a strong position as they realise now that their linear TV offerings, and associated advertising revenues, are going to be protected – viewing figures are set to fall some more, I think, but it won’t be long until they even out.  The majority have also established live streaming services in a market that is nowhere near as saturated as the SVOD space.  Offerings like Facebook Live are creeping in, and I’m sure Netflix will make a move soon, but the broadcasters have got to market first, which will be crucial when they battle for coverage rights.

Server-side

Underlying all of these developments is the success of server-side ad insertion – or, in the case of live streaming, server-side ad replacement. The technology, in the right hands, has developed to a point where ad breaks in linear can be replaced for simulcast so seamlessly that the viewer’s experience is utterly unaffected. There are none of the spinning dials or mis-cued timings that have become synonymous with other ad insertion solutions.

The impact of DAI on simulcast is significant, with Canal 13, host broadcaster of last year’s Copa América football tournament, reporting 10 times more inventory to replace ads. There is another big benefit of DAI, too, and that’s personalisation.  There’s been a lot of coverage of the success of Sky’s AdSmart system for set-top boxes, in which targeted adverts can be inserted into the linear broadcast. The results are impressive, and DAI for simulcast is a logical extension into the online world, where viewers tend to engage with streams on a much more personal level. When applied correctly, this adds a lot of value.

In the case of Canal 13, not only was the inventory vastly increased, so too was the view-through rate, which reached an unprecedented 98.7%. The combination of excellent user experience and personalisation, in an environment in which the viewer likes to press play, then sit back and relax, creates a situation where an ad spot in simulcast holds significantly more value than its equivalent in linear.

That was a year ago, and online audiences have grown substantially since then.  As we approach a summer that is packed full of sporting action, we are set to see simulcast viewing records be broken many times over. And the impact on digital revenues as a result will be huge. Server-side ad replacement will dominate the podium for many years to come.