• by Tyler Loechner  @mp_tyler, November 17, 2014

Rubicon Project, a major ad exchange and ad tech provider, on Monday announced it has acquired iSocket and Shiny Ads, two leading “programmatic direct” tech providers.

Terms of the deals were not disclosed.

“Programmatic direct” is the use of automation and data-targeting for direct, premium buys. Essentially, in a programmatic direct deal, buyers and seller still work with one another to flesh out details of ad trades but use automation to get there faster.

This is not the first time Rubicon has expressed interest in the programmatic direct space. In fact, the company launched its own programmatic direct platform in May of this year, rolling it out in a mobile-only beta with the intention of implementing desktop display and video support by the end of the year.

“Publishers are getting much more comfortable with the idea of remaining in control of pricing,” said Josh Wexler, head of buyer cloud at Rubicon, when the company announced its programatic direct platform earlier this year. “They want to continue to go up the stack and automate their guaranteed inventory.”

Today’s news indicates that Rubicon wants to up its own “ad tech stack” to help publishers get there.

By purchasing two of the programmatic direct space’s largest players, Rubicon has significantly consolidated the programmatic direct market — which it calls the “automated guaranteed market” — in one fell swoop. Consolidation has been occurring throughout the year in the technology space at large, and the ad tech sector has played -- and is continuing to play, given today’s news — its part.

"Automating guaranteed direct orders facilitates the buying and selling of the most premium, higher-priced inventory directly between buyers and sellers, similar to how TV advertising is bought and sold today," stated Frank Addante, CEO, founder and chief product architect at Rubicon Project. "Consolidating the guaranteed direct orders market with these acquisitions, combined with our existing direct order technology and scale, solidifies our market leadership in this rapidly growing segment.”

Addante is not speaking in hyperbole by calling the programmatic direct space a “rapidly growing segment,” as a recent report from eMarketer projects programmatic direct sales to account for 42% of the U.S. programmatic market by 2016, or $8.57 billion. That’s a significant jump from the 8% of the market that programmatic direct commands today.

ShinyAds’ and iSocket’s technology is expected to be integrated into Rubicon “over the next several months,” according to a note sent out this morning from Kaylie Smith, Rubicon’s head of seller cloud.

Rubicon’s platform will now be able to manage automated campaigns that take place on a direct, guaranteed basis (programmatic direct) and on an indirect, non-guaranteed basis (RTB).

The initial version of this article called Rubicon Project a supply-side platform (SSP). An SSP is still a component of the company's business, but Rubicon Project has recently emphasized the exchange model, providing technology to both buyers and sellers.