A system and method for digital ad insertion includes a unit to mark a video bitstream with Internet protocol (IP) splice points based on cue tone signals embedded within the video bitstream. The unit outputs a single transport stream (TS) that is sent across a packet-based network. A splicing device with an associated ad server is operable to receive the TS and detect the IP splice points. The splicing device signaling the ad server to retrieve one or more ads for insertion into the TS at one of the IP splice points. It is emphasized that this abstract is provided to comply with the rules requiring an abstract that will allow a searcher or other reader to quickly ascertain the subject matter of the technical disclosure. It is submitted with the understanding that it will not be used to interpret or limit the scope or meaning of the claims.