Systems and methods are described for server-side manipulation of underlying video content in order to dynamically place overlay content or other supplemental content within a video stream in a manner whereby a viewing user sees the advertisement content over or integrated within a portion of the base video content. Segments of the original video file may be modified by a server to display overlay content over a portion of the original content or integrated within the portion of the original content, and revised manifest data may be generated by the server and sent to a client device for playback. The systems and methods may include introducing a delay in the live stream relative to its original source in order to provide time for server-side creation of replacement video portions that include overlay content or other supplemental content.