Video Advertising: What It Is and How Video Ads Are Served
As technology evolves and audiences find new ways to consume content, video consistently tops the charts. Busy, mobile lifestyles favour formats that let people absorb information on the move — more condensed and accessible than blocks of plain text. The appeal of video is undeniable, and video ads are well on their way to becoming the dominant force in online advertising.
The Rise of Video Advertising
According to the IAB Video Advertising Spend Report, digital video ad spend grew from $12.1 billion in 2017 to $14.2 billion in 2018 — and was expected to reach $17.8 billion in 2019, a year-over-year increase of 25%.
Digital video ad spend over the years
Source: IAB's Video Advertising Spend Report 2019
The same report found that nearly two-thirds of video ad revenue comes from mobile devices, and nearly 75% of surveyed advertisers planned to increase their digital video ad spend over the following 12 months.
While most advertisers run video campaigns through walled gardens like Google and Facebook, many businesses are incorporating independent AdTech vendors into their video ad strategies as well.
What Is Video Advertising?
Video advertising is the process of displaying ads either inside online video content — typically before, during, or after a video stream (known as pre-roll, mid-roll, and post-roll) — or as standalone ads. The majority of video ads are bought, sold, and displayed programmatically using various targeting methods, and may also include interactive elements.
Video Ad Formats
The IAB defines three main video ad formats:
Linear video ads are displayed before, during, or after video content, much like commercials on television.
Non-linear video ads run concurrently with video content so that the viewer sees the ad while the content continues to play.
Companion ads include text, images, or rich media that accompany video without interrupting the viewing experience.
Where Are Video Ads Shown?
Video ads can be displayed across a range of channels and mediums, including:
- In web browsers on laptops and mobile devices
- In mobile apps (in-app video ads)
- On over-the-top (OTT) devices
AdTech Platforms Involved in Video Ad Serving
For any given video ad, there could be half a dozen or more AdTech platforms involved in the delivery chain between an advertiser and a publisher. Below are the main platforms used to serve video ads.
Video demand-side platforms (DSPs): Software used by media buyers — brands, advertisers, and agencies — to purchase video inventory from publishers via real-time bidding (RTB) auctions. Video DSPs function similarly to those used for display advertising. Core capabilities typically include bidding and campaign-optimization algorithms, behavioural targeting based on first- and third-party data, measurement and attribution, and campaign reporting and analytics.
Video supply-side platforms (SSPs): Software used by publishers to aggregate, manage, and sell video inventory to media buyers via RTB auctions. Most video SSPs include analytics and reporting, yield management and optimization, and inventory management tools.
Video ad servers: AdTech platforms that provide advertisers with centralized storage, tracking, and delivery of video ads. Ad servers also help publishers manage campaign tags from advertisers and determine which video ads to display in a given placement.
Video ad networks: Software that aggregates advertising space from various publishers and sells it to advertisers. Most ad networks don't own the media themselves — they facilitate the buying and selling process between publishers and advertisers. The exceptions are walled gardens like Facebook (which also owns Instagram) and Google (which owns YouTube, Blogger, etc.).
The Video Ad Serving Process
At its core, video advertising is not fundamentally different from display advertising from a technology standpoint — the main difference is simply what appears on the screen. The serving process can become complex depending on the number of AdTech platforms involved, as each needs to send and receive ad and bid requests.
Below is a basic overview of how video ads are served. The term "video player" is used broadly to mean any device capable of displaying video media with ads.
The steps:
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The user visits a site with a video player, which sends a request to the publisher's web server to retrieve the video content. The server responds with code that tells the browser where to fetch the main video content from and how to format it in the player window. The video player must support HTML5 video and VAST tags to communicate with ad servers.
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After the video content is fetched, the video player sends a request to the publisher's ad server to retrieve a video ad (or at least the advertiser's ad markup). This process requires sending a VAST request. The publisher's ad server programmatically determines which ad to display and sends back the chosen ad markup, counting an impression in the process.
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The ad markup loads in the video player and sends a request to the advertiser's ad server to retrieve the video ad. The advertiser's ad server counts an impression and returns a link pointing to the video ad's location so it can be displayed to the user. Most of the time, the video ad itself is hosted on a content delivery network (CDN).
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The video player sends a request to the CDN. The CDN returns the video ad file and the ad is shown to the user.
Depending on how the video ad space is sold — whether via RTB or direct deals — there will often be additional AdTech platforms involved at various stages of this process.
The Player
As the ad serving steps above illustrate, the video player is the central element of the entire process — it acts as the interface between the video content and the user. To display video ads, the player must be able to communicate with ad servers, as well as with the page or device it runs on.
The challenge is that most OTT and Advanced TV devices don't necessarily support the same technical standards. This is why a common schema is needed to standardize how ads are served from video ad servers and played back across a wide range of publisher websites and devices — desktop, mobile, connected TV, tablet, and more. That's where VAST comes in.
Video Ad Serving Template (VAST)
VAST is a common video ad serving template proposed by the IAB. After numerous iterations, the IAB Tech Lab introduced VAST 4.2, which brings important and long-overdue solutions to persistent problems in video advertising, including measurement, verification, and interactivity.
Despite this progress, adoption across the industry has been slow. According to the IAB, some device manufacturers and AdTech developers still use VAST versions 2 and 3.
Why Broad Adoption of VAST 4.2 Matters
Just as software updates keep devices secure, VAST updates are essential for streamlining ad delivery and reducing ad fraud — a persistent problem across online advertising.
The key benefits of industry-wide VAST adoption include:
- Faster implementation via standardized macro-based ad requests, enabling video players to more efficiently display ads
- Improved support for mobile and OTT platforms
- Combined audio and video standards through the inclusion of the Digital Audio Ad Serving Template (DAAST)
The introduction of VAST 4.2 also marks the final phase-out of VPAID — a format that was never widely embraced and likely contributed to the slow adoption of a common schema. VPAID offered limited transparency and introduced a range of industry problems related to trust, security vulnerabilities, negative user experiences, and poor fill rates.
What VAST 4.2 Does
The collection of video ad protocols — VAST, VPAID, VMAP, and MRAID — was once highly fragmented, making it difficult for vendors to align around a single standard. After numerous updates by the IAB, VAST has matured significantly and now incorporates both OMID and SIMID, meaning it covers ad delivery, measurement, and interactivity under one framework.
- VAST controls the delivery of video ads. It describes the ad, its beacons, and determines the location of the ad's various assets — media files, verification scripts, and interactive scripts.
- OMID handles measurement and viewability, supported by the Open Measurement SDK for implementation.
- SIMID controls interactivity within the ad.
How a VAST Request Works
To play a video ad, the video player sends a VAST request to an ad server containing information about:
- The ad that should be played
- How the ad should be played
- What should be tracked as the ad plays
The VAST request is an HTTP address with a query string, for example:
http://www.example.com/?LR_PUBLISHER_ID=1331&LR_CAMPAIGN_ID=229&LR_SCHEMA=vast2-vpaid
The VAST inline response contains information such as:
- Creative type
- Creative ID
- Creative dimensions
- Location of assets
- Tracking URLs
- What happens when the creative is clicked (click-through behaviour)
Once the specified events have occurred, the video player fires tracking pixels to record impressions and other metrics.
A sample VAST 4.0 response containing the above parameters looks like this (courtesy of IAB Tech Lab):
<VAST version="4.0" xmlns="http://www.iab.com/VAST">
<Ad id="20011" sequence="1" conditionalAd="false">
<Wrapper followAdditionalWrappers="0" allowMultipleAds="1" fallbackOnNoAd="0">
<AdSystem version="4.0">iabtechlab</AdSystem>
<Error>http://example.com/error</Error>
<Impression id="Impression-ID">http://example.com/track/impression</Impression>
<Creatives>
<Creative id="5480" sequence="1" adId="2447226">
<CompanionAds>
<Companion id="1232" width="100" height="150" assetWidth="250" assetHeight="200" expandedWidth="350" expandedHeight="250" apiFramework="VPAID" adSlotID="3214" pxratio="1400">
<StaticResource creativeType="image/png">
<![CDATA[https://www.iab.com/wp-content/uploads/2014/09/iab-tech-lab-6-644x290.png]]>
</StaticResource>
<CompanionClickThrough>
<![CDATA[https://iabtechlab.com]]>
</CompanionClickThrough>
</Companion>
</CompanionAds>
</Creative>
</Creatives>
<VASTAdTagURI>
<![CDATA[https://raw.githubusercontent.com/InteractiveAdvertisingBureau/VAST_Samples/master/VAST%204.0%20Samples/Inline_Companion_Tag-test.xml]]>
</VASTAdTagURI>
</Wrapper>
</Ad>
</VAST>
Understanding the VAST serving chain — from player request through ad server response to impression tracking — is foundational for anyone building or evaluating video ad infrastructure. As the industry continues to converge on VAST 4.2, platforms that adopt the updated standard will be better positioned to support accurate measurement, reduce fraud exposure, and deliver more consistent experiences across web, mobile, and connected TV environments.