#OPSPOV: Is Programmatic Direct a Point Solution?

Though it seems fraud and the scourge of bots were high of mind at the IAB Annual Leadership Meeting this week, EmpiricalMedia’s Steve Goldberg launched a few missiles via AdExchanger that I’m sure exploded in debate over in Palm Springs. One of these missiles included predicting “the end of stand alone self-service platforms,” because programmatic direct providers are “point solution companies.”

In a Twitter exchange (for that is how gentlefolk communicate these days), Goldberg emphasized he was not arguing that programmatic direct as a transactional channel is a point solution, but the highlighted providers (to name names, isocket, Shiny Ads, AdSlot, etc.) were only offering a solution, a small spectrum of the channel.

But it is a question that should be put out there – is programmatic direct a point solution? I got a little spicy in researching my latest tome, “The Maturation of Programmatic Direct” – I emailed my contacts at a bunch of programmatic direct providers with this blunt question: why is programmatic direct not a point solution?

They all answered somewhat similarly – prog direct is a big, big field, and within it exist a variety of point solutions; for example, insurance on guaranteed contracts. Indeed, Alanna Gombert, General Manager of Conde Nast’s Catalyst Platform, is not the only person that defines programmatic direct as a one-to-one programmatic relationship between advertiser and publisher, regardless of the transactional technology used. Yes, that would technically put private exchanges/DealIDs in the realm of prog direct.

So, no, programmatic direct is not a point solution, but every company that’s mainly offering the tech du jour is going to be whispered about as a “point solution provider.” Do you remember the RTB enablers just a few years ago? Yeah, those companies filing gigantic IPOs left and right were pretty recently labeled as peddlers of point solutions.

But as their products grew, so did their market potential. Shiny Ads CEO Roy Pereira commented in “Maturation” that he believes programmatic direct providers are on a similar trajectory, and right now their position is akin to the RTB cabal’s four years ago.

Eventually, we’re going to have to debate the difference between automating transactions and using programmatic direct channels – for now it seems some publishers are using the latter to accomplish the former. This is why Goldberg comments that programmatic direct provider tech “a simple subset of what the big SSPs do.” Thing is, the major SSPs have been threatening such technology, but products have failed to come to fruition. 

However, other players, notably those involved in yield optimization. Yieldex is testing a programmatic direct platform built via an agreement between AOL, Yahoo and Microsoft. FatTail also offers an automated order-processing product called PageGage

In addition, keep your eyes on the workings of the IAB’s Digital Advertising Automation Task Force (you may notice the URL contains “eBusiness_Task_Force”), which has developed the Open Advertising Protocol, an XML schema that aims to standardize transaction processes. Check out the repository on GitHub. (I hope to write more about this in the coming weeks.)

It seems SSPs or some other major platforms (side-leaning players seem to be increasingly reaching toward the middle – e.g., Xaxis gobbling up 247 Media) will either have to unveil their own programmatic direct solutions relatively soon, or acquire one of the fledgling providers. I’ve heard plenty of rumors of offers floated – from what I understand, prog direct providers see the potential for a much bigger business. Oh, to get a glimpse at a roadmap.

Prog direct is in a growth spurt – the buzz is strong with this one. As publisher adoption improves, demand-side awareness grows and buyers begin to use the channel en masse, we’ll have a clearer picture of whether the programmatic direct providers have staying power.