It's amazing the difference a single letter can make.
About a month ago, I wrote a RTBlog titled, "The Ruse Of Programmatic 'Direct.'" The post sparked some debates in the comments as to whether or not it really was a direct way to sell inventory.
The purpose of that post was not to question what programmatic direct companies do, but to question whether or not the word "direct" belonged at all. Some of the big guys in the programmatic direct space tracked me down and made their cases. And I must say, it was pretty convincing.
I had two different conversations, one with John Ramey, founder and CEO of iSocket; and the other with Anthony Katsur, CEO of Maxifier. Ramey started off by saying that he believes a lot of ad tech is BS, but that programmatic direct isn't.
So what does Ramey say makes a deal direct? "When people choose who they specifically work with," he reasoned. He went on to note that with real-time bidding (RTB), people are just "pointing and shooting" because they don't know exactly who they are working with.
"Is it a guaranteed campaign or not? Did you
specifically choose who you worked with?" he asked. Programmatic direct does not deal with biddable/non-guaranteed inventory.
"We've completely filled that manual gap in the middle with tech," Ramey claimed. "We've created piping directly from ad software into specific publisher software."
Another way Ramey rephrased his
argument was by essentially asking, "If we haven't considered Excel or Outlook middle men, why consider automated tech that essentially does the same thing (but better) a middle man?"
Katsur said the goal of programmatic direct was to increase efficiencies. He pointed out how RTB is hovering around 20% of publisher revenue, and asked, "How do you support was is arguably 70-80% of a publisher's revenue? By introducing efficiencies. Why not be able to do more with the same people you have? Spreadsheets and people don't scale."
Good point. But...
I had a question that I was sure would point out the flaw in using the word "direct." I asked Ramey what would happen if iSocket were to go out of business tomorrow…what would the brands and publishers that had been using them do? (The question was entirely hypothetical, Ramey assured me that iSocket isn't going to explode tomorrow).
Ramey answered that if iSocket were to explode tomorrow, there would be other companies to fill the void. And he's right about that. Plus, some publishers are building their own
APIs to programmatically sell their inventory direct with buyers, which Ramey said classifies as programmatic direct.
Good point. But...
What about private marketplaces? Isn't that a way to guarantee your trade partners while working in an automated environment? I asked Ramey if private marketplaces were the arch nemesis of programmatic direct companies. He said that in some people's perception, "yes," but "in reality, no."
Ramey called private exchanges "the top shelf of the basement," noting that they still deal with "leftover" inventory. "It
found a home but it's not everything." He was careful to mention that he did not think private marketplaces were bad, but that they weren't in direct competition with programmatic direct
despite that perception.
Okay, I'm convinced. If a buyer is guaranteed specific inventory direct from the seller, then it's a direct deal. The rest - how the money is traded, how the ads are displayed, how the buyer and seller flesh out the details, etc. - is irrelevant to the term "direct" at that point.