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.”