ISocket Reaps $5M In Funding As Publishers Flock To Programmatic Direct

isocketSan Francisco-based iSocket has raised $5 million in funding, led by Time Warner Investments. The round reflects publishers’ growing interest in the nascent area of programmatic direct ad buying.

This latest round represents the second half of iSocket’s B series (the first half was led by Foundry Group) and brings the company’s total to  $16.3 million. The money will bolster iSocket’s technology stack, including “iSocket for Publishers” and “iSocket for Advertisers.”

Programmatic direct allows advertisers to buy fixed-price, reserved inventory directly from publishers while using technology to streamline the burdensome and often paper-heavy invoicing process. Consequently, it often has a heavy sales automation component.

It’s this last point, iSocket CEO Richard Jalichandra said, that has resonated most with premium publishers in recent months. Many were reluctant to allocate a significant portion of their inventory to real-time bidding (RTB) – which is often equated erroneously with programmatic.

“Very few of premium publishers release more than 10% of their inventory to RTB because they’re selling out a lot of their stuff, or they’re reserving it for remnant,” Jalichandra said. “There’s been an exploding awareness [around programmatic direct] because they realize that programmatic direct, at least guaranteed fixed price around it, is very akin to what they’re doing today in their direct sales process.”

He claimed that because of this awareness, premium publishers want to run their entire ad sales through iSocket’s system. If this intent turns into a reality, it will also represent a significant change in the perception of “programmatic” held by premium publishers – many of whom assume it’s synonymous with RTB. “All programmatic means is an automated connection between a buyer and a seller,” Jalichandra said.

The iSocket solution is essentially a collection of APIs: Plug them in and the trading desks used to manage programmatic RTB inventory will also be able to handle programmatic direct inventory. ISocket is betting that this method, which allows advertisers to use the technology platforms they’re already familiar with rather than compelling them to learn a new system, will further spur acceptance of programmatic direct tools.

Ultimately, it’s still early days for iSocket and its competitors. “We’re in the first generation,” Jalichandra said, referring to providers of programmatic direct tools. “For the second generation, we’ll start layering in data on top. We do some basic data and targeting now, much like a publisher would within their own ad server, but we’re looking at more sophisticated first- and third-party data sources being injected into the mix to do real-time optimization.”

This sounds like integrating the solution with a data-management platform (DMP), though Jalichandra balks at the idea of creating an in-house tool. “I’d rather work with other leaders in that space,” he said.

In addition to its funding, iSocket also announced the hire of Kevin McCabe, who headed Microsoft’s advertising exchange and its programmatic direct strategies, as its new VP of business development, focusing on building channel partnerships.

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