What you should know about CTV ad servers: Types, key features, market challenges

CTV advertising is transforming the media landscape. 

It is growing 32% faster than overall media spending and is projected to hit $22.7 billion by the end of 2024, according to the IAB Digital Video Ad Spend & Strategy Report. 

Despite this impressive growth spurt, CTV is still held back by the high level of fragmentation within the ecosystem.

Ad servers are critical to the CTV supply chain

The CTV ecosystem spans advertisers, AdTech providers, media owners, and gateway platforms like streaming apps and devices. 

CTV ad server, a technology that processes bids, selects offers, and manages ad delivery, is central to supporting this complex ecosystem. 

At the moment, two types of ad servers dominate the CTV market:

• Publisher ad server (first-party): Handles publisher-side operations such as selecting bids, managing ad creatives, and optimizing placements.

• Advertiser ad server (third-party): Supplies ad creatives to publishers and offers analytics on metrics like viewability and completion rates.

Methods for inserting ads into target slots: CSAI vs. SSAI

Publisher-side CTV ad insertion operates in two ways:

• Client-side ad insertion (CSAI): Ads are requested and stitched on the viewer’s device, allowing for personalized targeting.

• Server-side ad insertion (SSAI): Ads are stitched server-side into a single stream for seamless delivery, which is especially effective for live broadcasts.

How is VOD ad serving different from linear OTT? 

In video-on-demand (VOD) scenarios, publisher ad servers manage ad requests, select winning bids, and deliver ads via CSAI or SSAI.

Linear OTT streams often use dynamic ad insertion for live content, enabling broadcasters to maximize monetization while preserving the user experience.

Addressable TV ads to the complexity of CTV ad servers

Addressable TV advertising is transforming the way broadcasters and advertisers connect with audiences, offering a personalized and data-driven approach. 

But how does the serving process work? Let’s dive into the details. 

• Marking the break. Broadcasters incorporate signals into their content streams—often using the SCTE 35 protocol or OAR Watermark. These signals pinpoint ad breaks within programming.

• Triggering the set-top box. When a set-top box (STB) detects one of these signals, it reaches out to an Ad Decision System (ADS) for guidance.

• Matching ads to demand data. The ADS analyzes viewer profiles and demand data to decide which ads should be served. It then delivers both the instructions and ad creatives to the STB ahead of time.

• Ad playback and reporting. The STB’s ad software takes over, playing the selected ad during the break and reporting back to the ADS with details of the delivery.

What CTV ad server features are industry standard?

To thrive in the growing CTV market, ad servers must offer a variety of bread-and-butter features. 

• Programmatic and direct sales support. With most CTV deals now programmatic, ad servers must handle various trade scenarios effectively.

• VAST tag integration enables targeting, measurement, and playback across devices.

• Dynamic ad podding groups ads into structured, dynamic, or hybrid pods, improving monetization and user experience.

• Frequency capping prevents user fatigue and ensures optimal engagement through advanced data sharing.

Tackling fraud in CTV advertising

The rise of Connected TV has opened up exciting opportunities for advertisers—predictably, a surge of ad fraud attempts followed the ecosystem growth spurt. 

According to DoubleVerify, the number of CTV fraud variants has tripled since 2020. 

Unprotected CTV campaigns face an average fraud rate of 11.2%, while protected campaigns maintain a much lower rate of just 0.6%.

Common CTV fraud scenarios to watch for

Fraudsters have become increasingly creative in exploiting vulnerabilities in CTV advertising. 

Here’s a quick rundown of widely used tactics. 

• Bot traffic: Fake impressions generated by automated systems.

• SSAI fraud: Fraudsters set up dummy servers or use cloud resources to create false impression counts.

• Device and browser spoofing: Disguising devices or browsers to mimic legitimate traffic.

• Malicious CTV apps: Apps designed to siphon ad dollars through deceptive practices.

Among these, SSAI (Server-Side Ad Insertion) fraud is particularly challenging. Since measurement doesn’t occur directly on the CTV device, it’s easier to manipulate impression counts and fly under the radar of detection systems.

Preventing fraud in the complex CTV ad supply path requires deliberate strategies at every stage. Below is a brief review of industry-standard practices. 

• Authenticate devices: Ensure ad servers can verify the legitimacy of devices making requests.

• Geolocation verification: Cross-check geographic data to confirm it aligns with the intended audience.

• Timestamp verification: Confirm that interactions occur in real-time and are not fabricated.

• Advanced fraud prevention tools: Use solutions like IVT detection, viewability verification, and blocking features to filter out false impressions.

CTV ad servers and privacy regulations

As other building blocks of the AdTech supply chain, CTV advertising is subject to stringent privacy laws like the U.S. Video Privacy Protection Act (VPPA) and the EU’s Consent Framework v2.2. 

According to these regulations, ad servers must separate user data from granular ad call information and support certified consent management platforms (CMPs).

Bottom line

CTV ad servers are pivotal in bridging advertisers and publishers. 

By leveraging dynamic ad insertion, frequency capping, and robust fraud prevention, they help media owners optimize revenue while safeguarding user trust. 

As the industry evolves, collaboration and innovation will be critical to navigating challenges and unlocking CTV’s full potential.