Programmatic is on the Path to Premium Direct

by Doug Huntington

The Trade Desk announced a product called OpenPath this week that will provide advertisers direct access to publishers’ premium inventory. To some, the announcement came as a surprise, and many wondered whether the DSP giant would start serving publishers directly, displacing SSPs. The Trade Desk rejected that speculation, saying it is focused on advertisers. But make no mistake — programmatic is on the path to premium direct. A tectonic shift is set to shake the ad tech industry.

Buyers, publishers, and DSPs will benefit from this transition. Currently, the supply path is too complicated, fees are too high for publishers, and there is not enough transparency for buyers into the premium inventory available to them. There are too many intermediaries in the programmatic market — and despite the Trade Desk’s assurances to the contrary, SSPs will suffer unless they are offering competitive prices and added value.

If buyers can more readily access premium inventory via direct transactions such as private auction, preferred deals, and programmatic guaranteed, they will get more bang for their buck and more transparency into audiences (at a time when that transparency is sorely needed). Publishers will be able to better monetize their inventory and avoid the value erosion of the open market. And DSPs will get the opportunity to provide a better service to customers.

The problem is that there is currently no standardized marketplace where DSPs can expose premium inventory, buyers can access it, and publishers can display it. As FatTail explained in AdExchanger this month, cultural and technical changes are needed to make the premium direct-oriented future of programmatic a reality. Publishers need to get more comfortable sharing premium inventory automatically; buyers need to get more comfortable paying for it. And the tech needs to be in place to execute direct deals without the hassle of “programmanual,” which currently drives too many sellers and buyers to the open market.

The Trade Desk’s announcement, then, is a move in the right direction. With big players involved, the technology required to advance premium direct will evolve, and publishers, advertisers, and DPSs will warm up to the possibilities. 

What we at FatTail would add is that, while The Trade Desk’s OpenPath is a step forward, there are many DSPs out there. The ecosystem would be better served if there were a single place where advertisers could discover premium inventory. OpenPath begins to address this problem, but it does not yet fully solve it. A standardized forum where all publishers can display their inventory and advertisers discover it will be necessary for the ecosystem to capitalize fully on premium direct.

We don’t expect publishers and advertisers will have to wait for long.