What is the difference between a direct feed and a hosted feed?
With a direct feed you hold the contract with the search engine yourself and run its ads on your own pages. With a hosted feed a provider holds the contract, often hosts the landing pages too, and pays you a share. Direct means more revenue and control but more responsibility. Hosted is easier to obtain and quicker to launch.
A hosted feed suits a media buyer who wants to concentrate on buying traffic. The feed provider supplies templates, keyword tools, reporting and compliance checks, and takes a revenue share for it. The downside is dependence: the provider can cap, pause or drop you, and you see only the data it passes on.
A direct feed suits a real publisher with its own sites and staff. You control the pages and get full reporting, but you carry compliance yourself and deal with the engine's reviews directly. Either way the engine can end the arrangement, so both carry platform risk.