• by Tyler Loechner , Staff Writer @mp_tyler, October 17, 2014

The programmatic ad industry’s “flight to quality” may be overstated -- at least at this juncture -- with GroupM’s cold shoulder to open real-time bidding (RTB) exchanges being the most common, and perhaps overused, example of a “trend” starter. However, it may not be hackneyed to the point of complete loss of significance -- as it shouldn't. The "demise of open RTB" may not be real, but the rise of more controlled programmatic channels certainly is.

Yesterday’s eMarketer projections, estimating programmatic ad spend to account for nearly two-thirds (63%) of all display ad spend by 2016, or over $20 billion, fans the fire.

eMarketer says that RTB auctions will account for 92% of all programmatic ad dollars in 2014, suggesting that the “flight to quality” and perception that RTB is synonymous with second- or third-rate inventory, thus not worthy of any significant ad spend, is just that -- a perception. Is there bad inventory on the ad exchanges? Of course, and it’s something that has and will continue to be documented. Has it kept advertisers from spending? Clearly not: eMarketer says U.S. marketers will spend over $9 billion via RTB -- and over $8 billion via open RTB -- in 2014.

But while the current state of the ad industry’s flight to quality has been overstated, the potential impact has perhaps been understated.

eMarketer singles out programmatic direct and private marketplaces as trading methods that are expected to take off in the coming years. Private marketplaces will account for roughly 10% of all RTB ad spend in 2014, per eMarketer’s estimates, but could grow to nearly 30% of all RTB spend by 2016.

Similarly, programmatic direct channels will account for 8% of all programmatic ad spend in 2014, but that number is expected to grow to 42% by 2016.

“Enthusiasm for more controlled, private programmatic setups like private marketplaces and programmatic direct echoed across all company types -- publishers, agencies, brands, etc,” Lauren Fisher, analyst at eMarketer, told Real-Time Daily yesterday.

According to the the research firm’s projections, those “controlled, private programmatic setups” that currently account for about 10% of all programmatic ad spend will account for nearly 60% in just two years.

That would be a rapid, game-changing shift.

"Private sign" via Shutterstock.