What is SGAI (Server-Guided Ad Insertion) in Streaming? 

Advertising is a tried-and-true way for streaming services to generate revenue. According to Statista, over-the-top (OTT) TV and video revenue was 74 billion dollars in the United States in 2023. A forecast suggested that this revenue will continue to increase to beyond 80 billion dollars by 2029. While SVOD (subscription-based video on demand) will likely remain the largest segment, ad-supported streaming will show the highest growth rate.

You are likely familiar with Server-Side Ad Insertion (SSAI) and Client-Side Ad Insertion (CSAI). However, there’s another promising option on the rise: Server-Guided Ad Insertion (SGAI). But what is SGAI, and how does it differ from its counterparts? In this article we will explore SGAI and how it can enable you to get the best of both CSAI and SSAI.

What is Server-Guided Ad Insertion (SGAI)? 

Server-Guided Ad Insertion is an advanced ad-insertion technology where the player and ad server dynamically guide which ads to insert based on real-time viewer data and context. The server signals the ad breaks while the client-side video player handles the personalization, ad insertion, and beaconing.

Here is a brief overview of how SGAI works:

• Manifest creation: The server generates a manifest with SCTE-35 markers, or another proprietary format. These markers outline where and when ad breaks occur during the stream.
• Ad request: When the viewer reaches an ad break, their device sends a personalized request to the ad server using targeting data so the server can deliver a relevant advertisement.
• Ad playback: The device handles the ad insertion and playback, ensuring the advertisement and main content flow seamlessly without delays.

 By using SGAI, streaming services can deliver a more personalized and efficient ad experience, benefiting both advertisers and viewers.

SGAI vs. SSAI vs. CSAI 

 How does SGAI compare to Client-Side Ad Insertion (CSAI) and Server-Side Ad Insertion (SSAI)?

Client-Side Ad Insertion (CSAI)

CSAI, which came first, involves inserting ads into the main content stream on the client side, meaning the video player handles the insertion. This method is easy to get started and requires minimal infrastructure while offering high levels of personalization and customization. However, some downsides of CSAI are:

• Difficult to implement across platforms.
• Highly susceptible to ad-blockers.
• Hard to ensure smooth ad-break transitions.
• No standard for signaling breaks, necessitating bespoke development.

Server-Side Ad Insertion (SSAI)

To address these shortcomings, many companies have transitioned to SSAI, also known as “ad stitching.” This technique integrates ads into the video stream on the server’s side prior to delivery, making it more resilient to ad blockers and easy to implement across multiple platforms. However, SSAI also has its drawbacks:

• Challenging at scale, resulting in higher costs.
• Reduced agility when adopting new features due to server dependency.
• Limited targeting and ad personalization possibilities.
• Inefficient use of ad inventory, as it is reserved ahead of the break, regardless of the viewer.
• Difficult to implement new ad experiences.
• Switching clear and DRM protected content reduces experience on smart TVs or makes implementations difficult.

How does Server-Guided Ad Insertion work? 

As mentioned above, you can think of Server-Guided Ad Insertion (SGAI) as a hybrid solution that combines the strengths of both CSAI and SSAI. In this method, the server generates a manifest with SCTE-35 markers, which indicate the timing and placement of ad breaks within the stream. The resulting manifest is not viewer-specific and can thus be cached by the CDN, making this solution highly scalable.

When the ad break is reached, the user’s device (video player) sends a personalized request to the ad server using the viewer’s targeting data, to ensure the delivery of a relevant advertisement. The video player then fetches the ad stream directly from the ad server, which is pre-transcoded and conditioned to match the content stream configuration. It then handles the ad insertion and playback so the advertisement and main content flow seamlessly without delays.

What makes SGAI work well is that the server and client device work in tandem to select targeted ads, while the client device is responsible for placing that ad rather than risking latency or technical interruptions when the server has to do both.

It’s also important to note the video player’s critical role in SGAI. In this context, the player evolves from an ending component in your video workflow to a pivotal orchestrator, enabling next-level ad experiences. It goes beyond playing content: with SGAI, the video player leverages insights regarding the platform, user, and session to collaborate with the server and deliver relevant ads with cross-platform compatibility.

This elevated role helps enhance experiences and support innovative formats like L-shape and double-box ads. The video player plays a critical part in achieving optimal latency by balancing buffer, device, and stream performance. As a result, the player is a key element not only for increasing viewer/fan engagement, but also opening up new opportunities for further monetization and sets new benchmarks for ad delivery and overall stream performance.

Distribution of the responsibilities depending on the ad-insertion technology are as follows:

(*) Depends if a bespoke integration is built between the player and server (stitcher) to exchange meta-data.

What type of advertisements are used in SGAI? 

Server-Guided Ad Insertion allows for a wider variety of ads to be placed within a stream. These advertisements can be before the stream begins (pre-roll), during (mid-roll), or after (post-roll). In addition to full replacement ads, SGAI can bring a number of innovative ad formats such as:

• L-shape ads, also known as squeeze back ads.
• Overlay ads.
• Companion ads.
• Double-box ads.

 These formats are popular for live streaming as these open up possibilities to monetize key moments without disrupting the viewer experience with a full replacement ad.

L Shape Layout 

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Double Box Layout 

Benefits of Server-Guided Ad Insertion 

The streaming world is competitive, which means it’s essential to strike the right balance between monetization, viewer engagement and technical considerations. Key benefits of SGAI include:

• Simplicity with no long manifests or DVR window limitations: With SGAI, the player only reaches out to the ad-decisioning server when a break is legitimately scheduled. This removes the need to pre-populate the manifest with advertisements.
• Unmatched scalability and low risk: There is no central component in the backend (stitcher) that needs to scale to all viewers or impacts all viewers if something goes awry.

• Guaranteed ad delivery: With SGAI, the player only requests inventory when the ad break will be played. Unlike SSAI and CSAI, which struggle with static break durations and unplayable ads, SGAI dynamically adjusts break durations and serves ads that work flawlessly on any device.

• Enhanced analytics and monitoring: The player handles ad spicing and is fully aware of all ad breaks. This means the player has complete information on the viewer, device, and playback session, allowing for detailed analytics that grant in-depth insights into viewer behavior and ad performance.

• Real-time flexibility and low latency: There is no need to perform ad-decisioning calls ahead of time or when playback begins, improving the video’s startup time. Secondly, the just-in-time request for ad breaks makes SGAI highly applicable for low- latency streaming. 

• Optimized viewer experience: The player controls the splicing process, so it’s aware of upcoming breaks, platform specifics, and content conditions. This feature empowers the player to select the optimal playback and insertion strategy tailored to these parameters.

• Agility and customization: SGAI lacks a central stitcher, eliminating a single point of failure that could impact all viewer sessions. This decentralization reduces risk and streamlines the adjustment-making process. Therefore, customers can adopt new features and roll out releases more efficiently.

• Cost-effective operations: Ad requests in SGAI only go out for ad breaks that will be effectively viewed. Through more insights into different sessions, the ad server knows upfront which ads are playable and relevant to the viewer. SGAI brings higher fill rates and rendering rates.

Cons of Server-Guided Ad Insertion

Server-Guided Ad Insertion (SGAI) is a newer ad insertion technique with a few drawbacks to consider.

• Limited vendor support: There are fewer server-side vendors supporting SGAI compared to Client-Side Ad Insertion (CSAI) and Server-Side Ad Insertion (SSAI). This limited support can make it challenging to find a suitable vendor for implementation.
• Player dependency: The player acts as the orchestrator in SGAI, meaning it needs to support this technique. Currently, only commercial video players, like Dolby’s THEOplayer, support SGAI. Native or open-source video players do not yet have this capability, which limits flexibility and options for developers.

• Evolving architecture: The architecture for SGAI is still evolving, and there isn’t a standard definition established by the industry. This lack of standardization can lead to inconsistencies and potential compatibility issues.

Comparing SGAI, CSAI, and SSAI

We covered a few differences between the three ad insertion models earlier in this document, but now that you know more about SGAI’s benefits and how it works, it’s time for a more in-depth comparison.

Dolby’s Server-Guided Ad Insertion Solution

With Dolby’s SGAI offered by MwareTV, and which solution is fully integrated within the TV Management System of MwareTV, we now offer a revolutionary new advertising solution. This is a cutting-edge Server-Guided Ad Insertion service for both live and VOD content.

The server dynamically manages and executes ad placements within your content, ensuring optimal timing and seamless integration for advertisements. The overall experience is more interactive and engaging— ads play seamlessly between, within, or around content, while remaining clickable, or offering QR codes, so viewers can engage with additional content.

Key Performance Metrics for Dolby OptiView SGAI

Here’s a polished overview of Dolby’s Server‑Guided Ad Insertion (SGAI)—specifically, its performance metrics like CPM, fill rate, match rate, viewability, and more, based on Dolby’s OptiView Ads offering:

From Dolby’s own sources, the key average improvements achieved via SGAI compared to traditional Server‑Side Ad Insertion (SSAI) are:

eCPM (Effective Cost Per Mille):
Average uplift of 76%, reflecting higher revenue per 1,000 ad impressions.

Fill Rate:
Increased by 132%, meaning a much larger share of ad opportunities are successfully filled.

Programmatic Match Rate:
Improved by 40%, driven by enhanced ad-tag signals that better match available inventory to demand.

Viewability Tracking Accuracy:
High tracking accuracy at around 86%, allowing advertisers to verify whether ads were actually seen—boosting trust and willingness to pay premium CPMs.

Ad Request Efficiency:
Around 50% fewer ad requests than SSAI, reducing backend costs and improving overall efficiency.

 How These Results Are Achieved

Smarter Ad Requests & Fill Rate Gains:
Ads are only requested when there’s a high likelihood of being viewed—no early prefetching for uncontrolled DVR windows. This real-timing strategy improves fill while cutting ad request volume.

Programmatic Logic Improvements:
Sending richer signals (device type, player size, content type, budgets) via client-side logic enhances programmatic match rates.

Greater Viewability Insights:
Client-side beaconing enables accurate tracking of metrics like whether the ad was seen, playback.