While the programmatic direct market now seems poised to explode, iSocket and Shiny Ads may have come too early to the programmatic direct space to become strong independent player. “It’s good to be an innovator, but it’s never good to be too far ahead of the market when you’re a little company,” said Susan Bidel, a senior analyst at Forrester. "It would appear that the sellers are ahead of the market, which is new," she added.
For publishers, programmatic direct provides automated access to premium CPMs, a great added value. On the demand side, programmatic direct's primary value is in reducing man hours. But agencies and brand advertisers with millions of dollars in budgets haven't cared too much about automating directly negotiated ad deals to date.
Once agencies change their tune, programmatic direct players will have access to the two-thirds of digital ad spend that hasn't yet been automated, said Ben Trenda, CEO of Are You a Human. He is a former Rubicon employee and former CRO of iSocket.
"The existing programmatic platform companies are competing for their share of the roughly one-third digital ad spend that's already been automated, cannibalizing the inventory that used to go to ad networks," Trenda said. "This deal gives Rubicon a huge lead in going after the other two-thirds, the part still being done with paper contracts."
Rubicon positions itself as a market leader with the acquisition. “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,” CEO Frank Addante said in a statement.
Among the SSPs, PubMatic just started its programmatic direct product, and OpenX still doesn't have a product, a source said. Rubicon's solution was already ahead of those competitors, multiple sources confirmed. And with the acquisition of iSocket, it snapped up the leader among companies specializing in the space.
Programmatic direct specialists left post-acquisition include BuySellAds and AdSlot. Some companies have gone sideways into the space: AppNexus launched Twixt, a programmatic direct interface, in April, and Yieldex entered the programmatic direct market recently as well. Bionic Ads, a division of media planning tool Next Mark, has a programmatic direct offering.
The most obvious player of all is Google. It's signaled it's entering the space with Direct Deals, first launched in 2012, but it still doesn't have much traction with its product, multiple sources confirmed. In the Forrester Wave conduced by Bidel six months ago, it received zero out of five in the category evaluating programmatic direct.