What is dynamic ad insertion (DAI)? Glossary

What is Dynamic Ad Insertion (DAI)

Dynamic ad insertion (DAI) is a server-side technology that enables real-time ad placement within streaming video content on connected TV (CTV) platforms. This allows advertisers to deliver personalized, targeted ads to different viewers, even when they are watching the same program. By stitching ads directly into the video stream, DAI creates a seamless viewing experience without buffering or disruptive transitions.

How dynamic ad insertion works in CTV

DAI operates by identifying decision points within a video stream where ads can be inserted or replaced. The process happens server-side, meaning ads are embedded into the content before reaching the viewer’s screen. This approach eliminates buffering between content and ads, ensuring a smooth playback experience.

Key components of DAI include:

Server-side ad stitching that seamlessly integrates ads into the content stream
Real-time audience analysis to determine the most relevant ad for each viewer
Dynamic targeting based on demographics, viewing behavior, and contextual factors

Benefits of dynamic ad insertion for CTV

DAI provides significant advantages for both publishers and advertisers in the streaming ecosystem.

For publishers:

Maximizes ad revenue by enabling targeted ad placements
Enhances user experience with fewer disruptions and better ad relevance
Provides in-depth analytics to optimize inventory monetization

For advertisers:

Enables precise audience segmentation and targeting
Optimizes campaign performance through real-time data insights
Improves ad measurement and attribution across different CTV platforms

Implementing dynamic ad insertion

Successful DAI implementation requires a robust ad-serving infrastructure and integration with programmatic advertising systems. Publishers and platforms typically leverage:

Ad servers that deliver and optimize ad content
Manifest manipulation tools that enable real-time ad replacement
SSAI (server-side ad insertion) technology to ensure smooth playback
Analytics platforms for performance tracking and measurement

Server-side ad insertion (SSAI): A form of DAI where ads are stitched into the video stream before delivery
Client-side ad insertion (CSAI): An alternative method where the viewer’s device fetches and plays ads separately
Ad pod: A sequence of multiple ads shown together during a break
VAST/VPAID: Industry standards that define how video ads are served and interacted with

Best practices for DAI in CTV

To ensure a smooth and effective ad experience, publishers and advertisers should:

Optimize ad transitions to match the content’s look and feel
Use AI-driven targeting to improve ad relevance
Monitor performance metrics and optimize delivery in real-time
Maintain compliance with privacy regulations like GDPR and CCPA

Future trends in DAI for CTV

As CTV adoption grows, DAI technology continues to evolve. Innovations like AI-powered personalization, cross-platform measurement, and interactive ad formats are shaping the future of ad delivery in streaming. The ability to serve addressable, non-intrusive ads will be key to maintaining viewer engagement while maximizing revenue.