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November 13, 2014, Article

Article

MediaPost: Paving The Way For A ‘Programmatic Direct’ Future

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The ironically named OpenDirect API from the Interactive Advertising Bureau (IAB) is just as paradoxical as the trading method it is designed for: programmatic direct.

But odd semantics aside, the automated side of the digital ad industry, after being so often relegated to the slums of the Internet, is now primed for a push toward quality.

The IAB’s announcement this morning that it has released an API to standardize “programmatic direct” trading — the hybrid trading method including both direct sales tactics and automation — comes after over one year of waiting. AOL, Microsoft, Yahoo and Yieldex announced their intentions to champion the API last fall and were later joined by MediaMath and Bionic Advertising Systems.

When AOL, Microsoft and Yahoo first came together to announce the plans — with Yieldex being named a “supporter” — programmatic direct had yet to fully emerge. Sure, it had been written about and discussed at conferences, but the budgets had yet to shift.

The game has changed since then, and will continue to change in the next few years. In fact, the IAB’s release of a standard API seems to come at a perfect time for users of programmatic direct channels; the launch is much more preemptive than reactive. Recent eMarketer estimates project programmatic direct channels to account for nearly half (42%) of all programmatic ad spend by 2016, up from just 8% this year.

Lauren Fisher, analyst at eMarketer, told Real-Time Daily earlier this month that all company types — publishers, agencies and brands — shared “enthusiasm for more controlled, private programmatic setups like private marketplaces and programmatic direct.”

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