Addressable advertising is coming to linear TV slowly because it’s hard to do, especially within the cable environment.
Putting relevant commercials in front of the right viewers requires getting legacy insertion equipment and set-top boxes to communicate with newfangled ad-management platforms. And if you want to do it programmatically — the way an increasing amount of ad dollars are coming into the market — a lot has to happen fast. That’s not easy to do, either.
That’s where Beachfront Media is staking its claim. The industry is clamoring for more inventory to be addressable and for that inventory to be available however buyers and clients want to transact.
While lots of companies jump into connected TV because it is growing fast and the digital architecture lends itself to addressability, Beachfront sees opportunity in the still-large number of cable subscribers and the fact that linear continues to draw the majority of ad spending.
Even if cord-cutting continues, “there’s going to be 20 to 30 million set-top boxes in homes for the foreseeable future,” Beachfront CEO Chris Maccaro said. “Building that interactivity is going to be important for at least the next decade.”
Spotted Need for Enablement
Beachfront started out in the supply-side platform business but has been pivoting from competing against larger ad networks into providing enablement technology.
“We’re a technology company, not a sales company,” Maccaro said, noting that Beachfront employs engineers rather than salespeople.
“Getting those systems to speak the same language is hard, and getting those systems to transact in anything close to real time is super-difficult, because it’s not how those systems were made to transact,” he said.
Beachfront works with multichannel video programming distributors in the U.S., including Frontier Communications, and abroad.
For its enablement work, Beachfront gets paid every time its system delivers an ad. To get to scale quickly, Beachfront also found opportunities to work with outfits with technology used by large portions of the industry, Canoe Ventures and SeaChange International.
SeaChange servers are used by cable operators around the world to insert addressable ads down to the ZIP code level. When Beachfront figured out how to get those SeaChange servers to respond to requests from programmatic buyers, MVPDs saw increased demand and revenue for their local ads.
Similarly, Beachfront developed a programmatic module to connect buyers to Canoe’s video-on-demand inventory from networks using Google Ad Manager or Canoe’s own ad management platform.
“We like them because they are real and they actually do real work,” Canoe Ventures senior VP of global sales and marketing Chris Pizzurro said of working with Beachfront. “And their stuff works.”
What makes Beachfront unique is its familiarity with cable plants. Canoe saw what Beachfront had done for Frontier and felt reasonably sure that something similar would work for Canoe. “They had already built something for this purpose,” Pizzurro said. “It was really about how they make their peanut butter talk to our jelly.”
Canoe is working with Beachfront to integrate systems as it moves into international markets including Latin America and India, Pizzurro said.
Pizzurro said the communication that goes on to collect programmatic bids and insert the right ad into the right program must happen in milliseconds. If it’s just a bit slow, the program will run without the ad and revenue is lost.
But when it works, “the national guys are happy and the local guys are happy because everyone has more ad impressions to sell,” Pizzuro said.
Amobee, which starts its cross-platform campaigns for clients with linear, likes working with Beachfront.
“What was appealing to us is they are in the linear space through video-on-demand and addressable set-top box inventory,” Amobee chief commercial officer Jack Bamberger said. “This was a perfect marriage between what they do and what we do as a technology provider, meeting our clients’ unmet needs.”
Competition Is Gearing Up
Beachfront certainly has competitors. First of all, there’s Comcast owned FreeWheel, which so far has largely focused on inserting ads based on direct sales, as opposed to programmatically.
Roku last month agreed to buy dynamic ad-insertion technology and the patents it is based on from Nielsen, which had been in testing mode.
And the large media companies — NBCUniversal, The Walt Disney Co, WarnerMedia — might all at some point decide to either build technology or bring it in-house as they build their advanced advertising and direct-to-consumer functions.
Despite the challenges, Maccaro said he thinks the Beachfront strategy is sound because building this technology is hard. “If you try to do it in a siloed approach, you miss the scale opportunity,” he said.
Maccaro said Beachfront is working on ways to address measurement and attribution. One key to its approach will be speed.
Traditionally, the turnaround on letting buyers know when ads ran and what impact they had was measured in months. Beachfront already has it down to a week and is aiming to do it within an hour.
“What we’re trying to do on linear is get our ducks in a row to make sure we give the demand side everything that they get today in a time that’s exponentially faster than they get it through a manual process,” Maccaro said. “The goal is to get them the data in real time so they can make optimization decisions in real time.”
