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Dynamic Ad Insertion (DAI) Part 1: Definition and Industry Update

December 6th, 2018   ||    by John R. Osborn

There’s no doubt the TV industry is advancing, with addressable advertising, real-time media buying, personalized messaging and interactive ads arriving on the scene. But these growth drivers’ success depends on how well the local TV ecosystem embraces Dynamic Ad Insertion (DAI) technology.

DAI enables ads to be rapidly and reliably assigned according to viewer automated content recognition (ACR) data. CBS and Nielsen recently partnered to bring DAI to linear TV. The ability to send different T/V (Television/Video) ad messages to different user devices has arrived.

What Is Dynamic Ad Insertion?

DAI is video ad technology that enables TV and video content providers to address video ads to viewers within live linear and/or video on demand (VOD) content. DAI “stitches” video content and ads into a single stream before serving it to the viewing platform (a video player on an internet connected site/app or on a Smart TV).

In the past, the end user device’s (a.k.a. the client side) platform would call for content and also separately call for an ad, then run both in sequence according to coding. This created latency (loading time) problems as well as a lot of room for error both in serving ads and tracking/reporting them. By moving the stitching from the client side to the server side, problems are radically reduced.

Google Ad Manager outlines the workflow differences between traditional non-DAI ad placement and DAI ad placement. Non-DAI video ad delivery requires four steps to fetch the ad through the Interactive Advertising Bureau’s (IAB) Video Ad Serving Template (VAST), while DAI-enabled ad delivery requires two comparable steps.


Two IAB standardization protocols play important roles in how DAI works:

  • Video Ad Serving Template (VAST) — Used to serve in-stream video ads, it permits “ad servers to use a single ad response format across multiple compliant publishers/video players.” The latest release, VAST 4.0 (and 4.1 in development), incorporates elements previously found in the IAB’s Video Player-Ad Interface Definition (VPAID) protocol, which is still used but is being phased out.
  • Video Multiple Ad Playlist (VMAP) — VMAP is defined as “a protocol that allows content owners to describe where ad breaks should be placed in their content when they do not control the video player or the content distribution outlet.”

These protocols are designed for ad flexibility, scalability, and delivery across devices and platforms.

Benefits and Issues

In the future, T/V advertisers will employ the targeting and DAI approaches across the entire video ecosystem (not necessarily spending siloed budgets separately for TV and online/mobile video). Streaming Media explains the latest benefits and issues for Server-Side Ad Insertion (SSAI), digital video nomenclature for the same basic DAI process outlined above.

Benefits already established in the digital video world include ad load latency reduction, individual media streams for each unique viewer where different end users get different ads, and ad blocking prevention since the stream can’t be detected as coming from a known ad-serving URL.

Issues being worked on include consumer privacy concerns and industry trust, as measurement institutes and ad agencies must trust a server-side solution.

In a follow-up piece on DAI, we’ll dive deeper into what DAI advances we’re seeing (like the CBS partnership), and how local TV buyers and sellers can manage change for addressable advertising opportunities.

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