The explosion of video content on mobile platforms has changed user engagement. It is the thing that captivates the most attention. Naturally, for developers and businesses using video, finding ways to monetize it has become a key focus.
In the process of dealing with various formats – from short clips on platforms like TikTok and Reels to on-demand videos on YouTube and live streams on Twitch — understanding how to tailor monetization strategies to each type is key to a successful outcome.
There are many strategies out there, but instream and outstream advertising stand out for their adaptability and effectiveness across different types of content. As an iOS engineer with extensive experience in video content and player development, I want to share key approaches to monetization, how they depend on the product type, and the technical specifics of each method.
Instream and outstream ad monetisation
Instream and outstream ads represent two very different yet complementary approaches to monetization.
Outstream ads run outside the main video content, appearing as banner ads, interstitials, or short video snippets embedded in feeds or between website paragraphs. They work exceptionally well on platforms such as social networks or news sites, where users consume content quickly and often scroll through fullscreen video feeds. Their main advantage is its independence from the main video, reaching large audiences without disrupting the primary viewing experience. Plus, they are easy to implement – but with a small caveat: they can be easy to miss. So, working out perfect placement and establishing eye-catching designs are the two aspects to focus on.
Instream ads play directly within the video, appearing as pre-roll, mid-roll, or post-roll, depending on their timing. This format is very effective for engaging users during longer video sessions, like on-demand or educational content, because viewers are already engaged. Instream ads better catch attention, but there is a risk of frustrating users if overused or poorly timed. Platforms like YouTube rely heavily on this format and must balance ad length and frequency to avoid losing viewers.
Together, instream and outstream ads serve different purposes, helping platforms boost revenue while keeping their audience satisfied and engaged.
Analytics of instream and outstream advertising
As with any metric-driven efforts, analytics for both instream and outstream advertising play a key role in evaluating their effectiveness and making sure platforms achieve their monetization goals.
Key metrics to track include:
- Impressions: The total number of times the ad is displayed.
- Clicks and Link Follow-Throughs: The number of user interactions, such as tapping on the ad or navigating to linked pages.
- View Depth: The percentage of the ad viewed, typically measured in quarters — start, 25%, 50%, 75%, and completion.
- Visibility Percentage: The proportion of the ad visible on the screen, which is critical for validating user engagement and ad performance.
These metrics often determine advertiser payments, so ensuring accurate tracking is a defining factor in this case. Developers usually address this by implementing mechanisms that measure ad visibility on the screen, providing reliable data to optimize performance and meet advertiser expectations.
Key development tasks for outstream ads
1. File formats and preloading
A smooth user experience and reduced skipped ads in app feeds depend entirely on preloading. Without it, users may see empty placeholders while ads load, creating a worse overall experience. The ad format affects preloading strategies: mp4 files need full downloading, which can take longer, while HLS (HTTP Live Streaming) starts playback faster by downloading just the first few seconds. The choice between these formats depends on server capabilities and hosting resources.
To streamline and simplify preloading, developers can create a dedicated component or class to manage it. On iOS, for example, an instance of AVPlayer can be created and assigned the URL of the video resource (either mp4 or HLS). This gives precise control over video loading and playback, with minimal delays for users. Preloading can also be optimized by dynamically loading content as users scroll through feeds. This requires developing an algorithm to monitor the current scroll position and communicate with the preloading component. Plus, it is key to account for bidirectional scrolling, ensuring smooth performance whether users scroll forward or backwards.
2. Memory management and playback queue optimization
Preloading hugely depends on effective memory management on the developer’s side. To free resources occupied by previously loaded ads that are no longer needed, developers need to decide when to clear cached ads to free up resources or persistently store preloaded videos without adjusting for scrolling changes.
However, this requires careful planning to meet advertising platform requirements and specifications. Ads that are preloaded but never shown to users can result in penalties from advertisers, which only highlights the need for a well-designed system that aligns with these rules.
Plus, the system has to have a robust logic governing the playback queue. A well-designed playback system enables multiple videos to be cached, loaded at the right moment based on product requirements, and cleared when they are no longer needed. Outstream ads are ideal in applications where content consumption occurs in a scrolling format or outside a primary video stream. They perform especially well in scrolling-based apps like TikTok or social networks like X, as well as for streaming platforms where ads fit naturally into content pauses.
The key development task of instream ads
Key Approaches to Instream Ad Integration
Implementing instream ads is more challenging than outstream ads because they are closely integrated with the main content. Ads must appear at exact moments and blend smoothly to avoid disrupting the viewing experience. There are three ways of achieving this:
- Client-Side (only the client knows about the ads).
- Server-Side Approach (only the server knows about the ads).
- Hybrid (both the server and the client know about the ads).
Server-Side Approach
In the server-side approach, ads are added directly by the server, which combines (docks) them with the main content. Tags and markers in the stream, which are often included in this approach, allow both ads and content to play smoothly in the same video player. This results in seamless transitions. However, since the client is not aware of the ads, adapting the interface or customizing it for individual users becomes more challenging.
Advantages
- Seamless playback: adverts become a part of the unified stream, ensuring smooth transitions and nearly imperceptible switching between the content and adverts.
- This approach also reduces the load on the client side. The application does not need to process adverts separately, simplifying implementation. As a result, playback stability is high, latency is minimized, and the quality of both video and adverts remains consistent.
Disadvantages
- Personalizing adverts is a significant challenge, as it requires creating and storing multiple versions of the same content with different ad insertions, which greatly complicates server architecture.
- The client-side receives little to no information about the adverts, making it difficult to adapt the interface dynamically or account for user preferences.
Client-Side Approach
In this approach, ad management happens on the user's device. The video player downloads and plays the ad based on instructions from the server, giving the client full control over when and how the ads appear. However, it requires significant technical work, especially to preload ads for smooth integration with the main video playback.
Advantages
- High flexibility and personalization. The platform can easily adapt adverts to individual users based on their interests and behavior. The result: a more tailored and relevant advertising experience.
Disadvantages
- Implementing this approach asks for complex logic to manage two video players simultaneously — one for the main content and another for adverts. This increases the load on the user’s device, which must handle additional processing and memory demands.
- Preloading ads is essential in this approach, similar to outstream ads. To do this, extra video players may be used to load ads in advance, or custom code can be developed to manage the loading and caching of advertising content. For example, on iOS, one AVPlayer handles the main content, while another handles the ads. During an ad break, the main content player pauses, and playback switches to the ad player. Once the ad finishes, the main content resumes smoothly. Here, timing is key. In some cases, instead of tracking feed scrolling like in outstream ads, the main content’s playback progress can be monitored to preload the ad just before it's needed, ensuring smooth playback without delay.
- The complexity factor goes up when multiple adverts need to be displayed consecutively, as you might have seen on platforms like YouTube. A common solution is to use a third player to load the next ad while the current one is playing. If more than two ads are needed, players that have completed their tasks can be reused. This system also allows for features like ad skipping, enhancing user experience.
Hybrid Approach
The key is in the name: this approach combines elements of the server-side and client-side methods. The server provides a unified playback manifest with ad insertion points, while the client dynamically fetches and plays ads at the right, designated moments.
Advantages
- Flexibility and efficiency. By distributing responsibilities between the server and the client, the system reduces server-side load and enhances scalability while maintaining smooth ad delivery.
- This setup also supports seamless playback and personalization: transitions between content and adverts are smooth, and adverts can be tailored dynamically to match individual user preferences.
Disadvantages
- Challenges in configuration and testing. Synchronizing server-side and client-side logic requires meticulous attention to detail. Any mismatch between server instructions and client execution can lead to timing discrepancies or interruptions in the video stream. Before deploying the system, it needs to be tested extensively, to ensure that the hybrid system operates reliably across various scenarios.
The hybrid approach is a balance between the simplicity of server-side integration and the personalization offered by client-side methods. When done well, it becomes a robust solution for platforms aiming to optimize ad delivery while maintaining a high-quality user experience.
When talking about Instream advertising, it should be noted that it is possible to implement it in such a way that several commercials are played in a row at the moment of an advertising pause. In the first case (Server-Side) the load on the server will be even greater, in the second case (Client-Side) — it will be necessary to create a complex architecture for working with players and preloading several clips for a seamless transition. The third approach (Hybrid) will be the most painless and is the easiest, as the video stream continues as usual, with just additional information added to the manifest. The main challenge here is skipping ads, as it requires working with timings in the player within a single HLS stream.
Monetizing video platforms requires a careful, precise balance between technical implementation and user experience. With the growing diversity of video formats, simple strategies are not as effective for anyone, and the need for tailored approaches is more obvious than ever. By understanding user preferences and using these methods to their full potential, developers and businesses can align monetization efforts with modern video consumption, driving both revenue growth and audience satisfaction.