Marketers want quality video inventory and publishers and broadcasters are producing more video, but the digital media ecosystem remains disconnected.
The chance to secure a position in online video advertising as those supply and demand forces click into place lured Chris Maccaro from Oath, where he was head of emerging markets, to the CEO job at the video SSP Beachfront Media. He started the job last month.
Beachfront, a video SSP and ad network which employs 35 people and claims to be profitable, sold a majority ownership stake last December to two private equity companies, Growth Catalyst Partners and PSP Capital, an investment vehicle backed by former US Commerce Secretary Penny Pritzker.
“We got excited about because of Beachfront’s laser focus on video and the dynamics underpinning video consumption specifically in mobile and OTT,” Scott Peters, managing partner of Growth Catalyst Partners, told AdExchanger last year.
Maccaro is betting that only a few companies such as Netflix or HBO will dominate subscription revenue and ad-supported content will have a resurgence – which is where independent video companies like Beachfront could see tremendous growth.
While Google, Facebook, Amazon, Oath and AT&T’s Xandr will absorb much of that growth, Maccaro says Beachfront can adjust to the needs of publishers more quickly than the big platforms.
But if Maccaro’s prediction comes true, Beachfront will only be able to capitalize if it has enough inventory. One of Beachfront’s key investments in the next six months will be to expand its direct publisher business, Maccaro said. The challenge is that there isn’t a lot of OTT supply, as it’s too expensive for many publishers or content creators to build and support an OTT app.
The other challenge for Beachfront and other video advertising companies with programmatic roots is that a low take rate for digital campaigns is around 10-15%. But TV advertisers expect a 1-2% cut of every media dollar going to media-buying vendors – which isn’t sustainable for Beachfront.
Beachfront won’t charge a fee to publishers who use its technology, Maccaro said. The company needs to incentivize adoption before it can assert a stronger cut of media.
But most of those media companies will lean in to video technology vendors if they see results from live streaming or programmatic marketplaces, Maccaro said.
“If you enable that on behalf of publishers,” he said, “then you open up a ton of supply and value that’s not sitting in the ecosystem right now.”
This post was syndicated from Ad Exchanger.