As holding companies distribute programmatic knowledge to their operating agencies, trading desks are repositioning to stay relevant to clients.
Xaxis, GroupM’s trading desk that pioneered the model of selling media to clients at a mark-up on a guaranteed CPM, will now buy for clients on guaranteed metrics that impact business performance, such as viewability and incrementality.
“Programmatic should deliver a lot of value to brands, but as an industry we’ve made it very complex and, if anything, less accountable,” said Nicolas Bidon, global president at Xaxis. “The metrics we use, whether it’s CPM or CPC, are really old.”
To deliver on business outcomes rather than click- and view-based metrics, Xaxis is building custom algorithms for clients through its machine learning platform, Copilot.
For a hotel booking platform, for example, Xaxis is optimizing its spend toward guaranteed incremental visitors. For an auto manufacturer, it’s delivering on an overarching success metric that weights actions like brochure downloads and test drive sign-ups into an overall score.
Xaxis wants to eventually rent these algorithms to clients who don’t want to work through the trading desk to buy their media.
“[The client] would have full transparency of what media they buy, where it runs and what was the clearing price,” Bidon said. “It’s quite the departure from our regular business model. One-size-fits-all doesn’t always work.”
Xaxis, which works with 3,300 brands in 47 markets, is still producing more than $1 billion in revenue annually. The company has 1,800 employees globally.
Bidon spoke with AdExchanger.
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