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CORRESP
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November 14, 2023

VIA EDGAR

Amy Geddes and Lyn Shenk

Division of Corporation Finance

Office of Trade & Services

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Re:
    Direct Digital Holdings, Inc.

    Form 10-K for Fiscal Year Ended December 31, 2022

    Filed April 17, 2023

    File No. 001-41261

Amy
Geddes and Lyn Shenk:

We are writing to respond
to the comments provided by the Staff (the “Staff”) of the Division of Corporation Finance of the U.S. Securities and
Exchange Commission in your letter dated September 18, 2023 (the “Comment Letter”), relating to the Direct Digital
Holdings, Inc. (“we”, “Direct Digital”, or the “Company”) Annual Report on Form
10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”).

In this response, we may refer
to the analysis of our position regarding principal vs agent provided in our response letter dated September 18, 2023 (“Initial
Response”). The Company continues to believe that its accounting treatment is appropriate and consistent with our facts and
circumstances including our contracts and manner of operations. However, we acknowledge that we can provide additional clarity and update
certain disclosures identified by the Company and the Staff.

For ease of review, we have
set forth below the numbered comment of the Comment Letter in bold type followed by the Company’s response thereto.

Form 10-K for Fiscal Year Ended
December 31, 2022

Notes to Consolidated Financial
Statements

Note 2 - Basis of Presentation and
Summary of Significant Accounting Policies, page 73

1.
We note your response to comment 2 with regard to buy-side advertising. You state you offer “managed advertising campaigns”
to advertisers through Huddled Masses and Orange142. Your Huddled Masses website states you offer web design, marketing/sales integration,
conversion rate optimization, analytics audits, creative/copy development, and media planning and buying. In addition, your response refers
to “consulting services.” Please clarify whether these offerings are components of “managed advertising campaigns”
or separate offerings. If separate offerings (or available as separate offerings), it appears that your revenue recognition accounting
policy should address measurement and recognition of each material offering type. Please advise.

    Amy Geddes and Lyn Shenk

Securities and Exchange Commission

November 14, 2023

Page 2

Response to Comment:

The Company’s
Initial Response provided the types of contracts utilized by the buy-side segment of the business, as requested. Larger customers with
multiple tactics will generally execute a Master Service Agreement (“MSA”) and/or Statement of Work (“SOW”). Each
digital media campaign, which is part of a broader managed advertising campaign (MSA or SOW), will also have a specific Insertion Order
(“IO”) that details the terms of the specific digital media campaign. The Company’s buy-side business offers 50+ tactics
for services to customers. Of the top 80% of revenue (for 18 customers), the average number of tactics used per customer is 13 with a
high of 30 and a low count of three. The customers who make up the lower 20% of revenue (99 customers) average four tactics with a high
of 11 and a low of 1 (14 customers). As demonstrated by this analysis, it is unusual to offer only one service to customers on the buy-side.
Further, the total revenue identified as “consulting” made up less than 1% of the buy-side revenue and less than 0.2% of total
revenue.

2.
Please tell us whether, and the extent to which, the buy-side business derives revenue from programmatic purchase of advertising
by advertisers not under a “managed advertising campaign.” In this regard, we note your disclosure on page 73 that you offer
your buy-side service on both a fully managed and self-serve basis. If so, please provide us with your principal versus agent assessment
for these transactions, including your consideration of the definition of control (ASC 606-10-25-25), how control is obtained (55-37A),
and, if evaluated, the indicators of control (55-39). Please also tell us relevant contractual terms (rights and obligations) between
you and both the end consumer (advertiser) and the other parties involved in providing the specified goods or services for these transactions.

Response to Comment:

As described
in response to comment 1, buy-side customers purchase multiple tactics, one of which may be the programmatic purchase of advertising.
The Company had at one time considered offering self-service advertising, however, all current programmatic advertising is sold on a fully
managed basis and the disclosure on page 73 of the Form 10-K is no longer consistent with our current practice. In response to the Staff’s
comment, in future filings the Company will modify its disclosure consistent with the following:

“… The Company offers its services
on a fully managed and a self-serve basis, which is recognized over time using the output method when the performance
obligation is fulfilled. ...The performance obligation is satisfied over time as the volume of impressions are delivered up to the contractual
maximum for fully managed revenue and the delivery of media inventory for self-serve revenue.”

3.
We note your response to comment 2 with regard to sell-side advertising. You state your contracts with publishers (i.e.,
suppliers):

 · provide you with “the right to sell” ads “in exchange for
a fixed rate for digital ad units sold.”

    Amy Geddes and Lyn Shenk

Securities and Exchange Commission

November 14, 2023

Page 3

 · you are required to pay the publisher “a fixed rate” for any ads
you sell and “that rate is unaffected by the price paid by the advertisers.”

The former
suggests your consideration does not vary based on the final price set in the marketplace while the latter suggests it does. In addition,
on page 51 of your annual report you state, “we pay publishers a fee, which is typically a percentage of the value of the ad impressions
monetized through our platform.” Please clarify how your consideration is determined and whether your use of the term “rate”
with regard to the amount you and the publisher retain means an absolute amount or a rate such as a percent of the auction price.

Response to Comment:

The Company
notes to the Staff that as used in the contexts described above, as well as certain other of the Company’s disclosures, “rate”
means a percent of the auction price. That rate does not change regardless of the auction price.

4.
With regard to sell-side business, you state you control the digital ad units before they are transferred to advertisers
because your contracts with publishers “permit [you] to sell the digital ad units” to advertisers. Please tell us why you
believe a right to sell provides you control based on the definition of control (ASC 606-10-25-25) and the explanation of how control
is obtained (55-37A). Please also tell us whether your right to sell is exclusive for the publishers you serve.

Response to Comment:

Our right
to sell digital ad units for our publishers is not exclusive, in that the publishers can sell their digital ad units to many different
trading partners. Even when a digital ad unit is assigned to the Company by the publisher, there are other parties who may have the opportunity
to offer the digital ad unit for auction. The Colossus SSP’s platform will evaluate the digital ad unit for its quality –
specifically to eliminate any invalid traffic. The platform will then combine this with more information, including context and other
features that make the digital ad unit more attractive and marketable. Multiple buyers may bid on the digital ad unit through the Company
or through other trading partners of the publisher. As specified in ASC 606-10-55-37A, if the reporting entity combines goods or services
into a combined output that forms a single performance obligation to the end consumer, the reporting entity is the principal for all of
the goods and services in that combined output. Based upon the activity of the Company, we believe this supports our control of the digital
ad units and our classification as principal. Further, if the digital ad unit is determined to be valid and purchased or used to display
a digital ad through the Company, then the Company is liable to pay the publisher for the display, regardless of whether the Company is
paid by the advertiser. As such, the Company is at risk, which further supports our belief that we control the digital ad units.

We also considered
the control scenarios described in ASC 606-10-55-333 related to meal vouchers. We believe that this scenario does not apply to us because:

 · As described within this response, the Colossus SSP combines the ad request from
the Publisher with other information into a combined offering that is then presented to customers of the Company. Further, the customer
does not interact directly with the Publisher.

    Amy Geddes and Lyn Shenk

Securities and Exchange Commission

November 14, 2023

Page 4

 · As described in the response to comment 6, the ad request is associated with a
specific time and a specific place where a digital ad unit can be displayed by the Publisher. The digital ad units exist before the transfer.

5.
With regard to the sell-side business, you state you are “responsible for fulfilling the promise to the customer”
and you “take responsibility for the acceptability of the digital ad units.” Please tell us what promise you are fulfilling
and explain how specifically you are primarily responsible for fulfillment. As part of your response, please tell us what your contracts
and other material (such as marketing) say about primary responsibility, whether you have discretion in selecting the supplier (i.e.,
publisher) for a requested ad placement, whether you are primarily responsible for the performance of the publisher, and any other analysis
relevant to the assessment of primary responsibility for fulfillment under 55-39a. Provide representative sell-side agreements with publishers
and advertisers if they may be helpful in illustrating relevant contract terms.

Response to Comment:

As detailed
in our Initial Response, the Company’s success is based on curating advertisers and increasing access to publishers with valuable
ad impressions as well as enhancing ad inventory quality. Our website and contracts specify certain obligations that we have with our
customers (advertisers) and suppliers (publishers).

Through the
operation of the Colossus SSP, the Company has discretion as to if or when we send a digital ad unit to a DSP, advertiser or agency to
consider for purchase.

The Company’s
Quality Guidelines for Creative (see Exhibit A for excerpts from the Company’s website) indicate that the Company will scan and
otherwise check all materials for compliance with quality guidelines, which benefits both our customers (advertisers) and suppliers (publishers).
Performing these tasks ensures that the digital ad units are of an acceptable quality.

The Company’s
standard Master Services Agreement for DSPs outlines a number of responsibilities for the Company including:

 · The Company (SSP) will customize and implement an online advertising exchange that
performs in accordance with specifications and allows the DSP (customer) to purchase deliverables (impression inventory delivered by SSP)
in near real time.

 · Bid requests are sent to the DSP by the SSP for bids on a Deliverable consistent
with the Company’s management of the exchange.

 · SSP provides reasonable instructions and support to DSP.

 · Impression and payment calculations are based upon the SSP’s measurements.

Each of these
items (operating the SSP, sending bid requests, providing support to the DSP (customer) and providing the impression and payment calculations)
are a component of the fulfillment activities performed by the Company.

    Amy Geddes and Lyn Shenk

Securities and Exchange Commission

November 14, 2023

Page 5

The Company’s
standard Publisher Master Services Agreement outlines a number of responsibilities for the Company including:

 · The Company and the Publisher agree that the Company buys advertising media (inventory
delivered by Publisher including impressions or other desired actions) and Publisher desires to sell and Company desires to purchase certain
Publisher products and services through Colossus SSP.

 · Colossus SSP means the supply side advertising platform owned and operated by the
Company that allows buyers to purchase, in real-time, impression inventory delivered by the Company.

 · Company will pay the Publisher revenue for advertising material actually delivered
by Publisher to each of Publisher’s Sites. To clarify, there is no sequential liability stated or intended in these agreements
 – nothing relieves the Company of its obligation in the event that the Advertiser does not pay the Company.

 · Approved monthly spend may be set by the Company in the Agreement as a spending
limit for which it will be liable for any calendar month.

 · Company may be responsible for calculation of statistics including impressions.
Note that this is our default contract provision. The Company does allow the Customer to utilize an ad server or their own systems to
validate volume statistics.

 · Company represents and warrants to Publisher that it shall use reasonable commercial
efforts to contractually bind its upstream Advertiser to ensure compliance with all obligations with regard to Advertising materials provided
by the Advertiser and to ensure that Company, Publisher and Advertisers comply with all applicable Data Protections Laws with regards
to end user’s data collection, tracking and processing.

A recent article
published about our industry (see Exhibit B) and quoting the Company on its obligations to its Publishers is consistent with our contracts
and manner of operations. It also highlights the differences between us and some of our counterparts in the industry. We present this
information to the Staff to demonstrate the consistency of our approach regarding our status as principal.

We believe
that the Company’s contracts, website and manner of operations all support the Company’s position that it is responsible for
fulfilling the promise of providing high quality digital ad units to the customer and that we take responsibility for the acceptability
of the digital ad units.

6.
With regard to the sell-side business, you state you “purchase” advertising inventory from publishers to sell
to advertisers. Please clarify whether the “purchase” and “sale” take place instantaneously at the time someone
loads a web or app page and you and other intermediaries find an advertiser desiring to place an ad for that individual. We note in your
response you state you do not have inventory risk and, on page 61 of your annual report, that your sell-side platform “allows publishers
to sell, in real time, ad impressions to buyers.” Therefore, please clarify whether you “purchase” the ad inventory
or instead facilitate its sale to the advertiser.

Response to Comment:

In response
to the Staff’s comment, the Company acknowledges that the disclosure on page 61 could be improved and clarified. In future filings
the Company will modify its disclosure consistent with the following:

“… The Company’s sell-side
platform allows publishers us to sell, in real time, ad impressions purchased
from our publishers to buyers.”

    Amy Geddes and Lyn Shenk

Securities and Exchange Commission

November 14, 2023

Page 6

As described
in the response to comment 5 and as stated in our contracts, the Company purchases the ad impressions from the publishers and sells them
to DSPs, advertisers and agencies.

For the Staff’s
information and assessment, we describe below the process for a digital ad unit that takes place within the Colossus SSP’s digital
technology:

 · The