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A Primer on Satellite TV Addressable

For the last 10+ years, I’ve worked on targeted video advertising in one way or another. One of the most fascinating discoveries for me was the technology that enables dynamic ad insertions. The intricate stacks and ecosystems to deliver targeted advertising in live linear TV are quite interesting to unpack.

Addressable advertising is to show different a ad-copy to different homes who are watching the same content. Content may be live – that is everyone is watching the same content at the same time, or on-demand where the same content may be seen on different days or times.

This post dives into the satellite-TV implementation of addressable advertising.

Some definitions and terminology:

To help with the technical details of these systems, it’s useful to define a few concepts. The schematic below outlines how content and ads are distributed in a typical 30-minute TV live telecast on a cable network. In the example below, the 30-minute telecast contains 20 minutes of content and 10 minutes of ads.

Schematic of a Cable Network Telecast

Minutes 1-14 are broadcast nationally by the network to all distributors. The distributor has no way of knowing which minute is an ad and which is content. Ad minutes 11-14 are called national or network ad minutes. Minute 15 is a local or distributor ad minute. Distributors can insert an advertisement they’ve sold in this minute. The method to signal to the distributor that the local ad minute is imminent is using a standard called SCTE-35 colloquially known as a Cue Tone. The actual ad-video that needs to be aired is called an ad-copy, copy or creative.

To successfully deliver a targeted ad to a home, the replacement ad-copies, the targeting information for a household, and the specific content in which the replacement is to occur all have to be available prior to the actual replacement.

Addressable Insertion in Satellite Systems:

Satellite providers do not have a 2-way wired link into their subscriber’s home to facilitate all of this. They do have satellites in orbit, through which must pass the targeting data, ad-copy and cue-tone.  from the uplink center, through the satellite and down to the individual set-top-box.

Satellite based addressability became feasible following the growth of time-shifted or DVR habits. Additionally, as HD content proliferated, satellite set-top-boxes started to include more CPU capacity to handle compressed-HD content and more hard-disk storage to DVR such content for longer periods of time. With this sort of powerful equipment available, it wasn’t a surprise that companies and executives saw the potential for advertising. Invidi Technologies created the tech stack and software that made widespread commercial deployment possible. For the curious, here’s one of the patents for the Invidi tech

The technology works like this: The satellite provider’s master CRM database has a list of all paying customers, and the set top box equipment assigned to them.

The name and address of the subscriber can be matched to first and third party datasets to label a particular household, and by extension the set-top-boxes in that household, as being in market for a product. Throughout the day, this information is beamed up and down such that each set top box gets to “know” the home it is in and which advertising segments it belongs to. Also included in this data is media-campaign information such as flight dates, CPM, budget etc. which lets each box apply logic to arrive at a prioritized list of ads to play out. This is how targeting and campaign information gets distributed to millions of homes nationally.

Separately, a portion of the DVR hard disk is set aside to store the ad-copies. themselves. Periodically, the ad copies for all advertisers are then sent up to the satellite and gets beamed down to subscribing homes. Each set top box only copies over the ad copies that are relevant to the campaigns it will be running and ignores the rest.

Once the targeting information, campaign information and the ad-copies are available on the box, all that’s needed is a cue tone that signals when an addressable ad can be played out. The end user sees an ad copy that is simply being played back from the DVR.

User experience and related considerations:

As you can see, the delivery of addressable ads on satellite TV requires quite a bit of engineering and data work. This is made even more complex due to the need to keep the end user-experience seamless. I’ll give you two examples to illustrate the point:

Most people tolerate ads, but don’t necessarily like them. Many of us have a habit of switching channels or fast-forwarding when an ad shows up. What happens if the user tunes-out in between an addressable ad? In the mechanism described above, the DVR playback of the ad needs to stop, and live-linear playback of the target channel needs to begin.

Another issue is that DVR space on a satellite-TV set-top-box is a finite resource. How many ads should be downloaded? What happens when storage starts to get full? Competing claims on a finite resource require the development of prioritization schemes.

There are many other such edge cases that have had to be addressed. It’s to the credit of the many engineers and businesspeople that these issues have been solved and a viable business developed.