• by Tyler Loechner , Staff Writer @mp_tyler, November 18, 2014

“Programmatic direct” just took the lead against “programmatic native” in the invisible race for oxymoron du jour.

The programmatic ad space took a step toward a more direct future by virtue of Rubicon Project’s acquisition of two companies that specialize in the space: ShinyAds and iSocket.

Programmatic direct, a combination of direct-with-publisher trading tactics and automation, is projected to become the centerpiece of the programmatic ad industry by 2016. Recent eMarketer estimates project that programmatic will account for 63% of all U.S. digital display ad spend by 2016, with programmatic direct accounting for 42% of that, or $8.57 billion. Currently, programmatic direct accounts for 8% of total programmatic ad spend in the U.S.

The industry is not jettisoning real-time bidding (RTB), which is still projected to account for a massive clump of total programmatic ad spend, but the focus on applying automation to more “premium” ad buys is clear.

"With the tremendous growth in the programmatic space over the last two years, we can expect to see additional consolidation in the ecosystem,” said Darline Jean, chief operating officer of PulsePoint, an ad exchange. “Rubicon’s move makes perfect sense as we’re seeing more and more premium publishers embrace automation technology and place inventory into programmatic channels that was once reserved for direct buys only.”

The consolidation component of Rubicon’s buys was echoed by others in the industry, including Andrew Casale, VP of strategy at Casale Media.

“Programmatic guaranteed belongs within the exchange and this move signifies that reality,” Casale said. “This makes a lot of sense from our vantage point, as we have been building and expanding these capabilities inside our broader platform for some time. This helps Rubicon get in the game, and also consolidates the option set for publishers."

The idea of automating parts of direct, guaranteed deals isn’t new -- see: fax machines -- but Rubicon’s announcement is newsworthy for a few reasons.

First, Rubicon is a major player in the ad tech space and has shifted from a pure supply-side platform (SSP) to position itself more in the middle of the equation, as an ad exchange, through a combination of building technology, partnerships and acquisitions.

Second, the ad tech space at large has been consolidated considerably in 2014. There are still several large independents out there, but much less so than one year ago. Rubicon’s move to acquire two companies in the same space served to consolidate the programmatic direct ecosystem faster than one might have expected.

And finally, the push to automate processes of direct, guaranteed deals is less about teaching an old dog new tricks and more about teaching a new dog old tricks. Digital advertisers have been wooed by the promise of programmatic tech, although not all have been wowed.

Those that were wooed but not wowed like the technology -- it enables them to do everything faster, cheaper and more effectively -- but didn’t like its application to open RTB ad exchanges that were littered with fraud and other poor inventory options.

The rapid rise of programmatic direct is about combining both worlds.

"River" image via Shutterstock.