Jay Sears, GM of the Rubicon Project's REVV Buyer demand-side offering, floated this possibility last week.
"Just like there are agency networks inside the holding companies to avoid conflicts… look for the biggest holding companies to create two or more trading desks under the same holding company roof," Sears told AdExchanger's David Kaplan. "This will be done to accommodate both conflicts (competing clients) and different business models (transparent and nontransparent; fee and performance). This is a good outcome for the holding company."
Conflict shops have been employed more frequently in recent years. Just last month, AdAge reported Omnicom Group is preparing to launch a third media agency to compete for business alongside its OMD and PHD brands. The move is seen largely as a means to avoid concerns over competitive conflicts.
Another example is CHI & Partners, which set up an agency to receive work for The Carphone Warehouse Group that would allow it to continue to serve Argos. In the PR sphere there is Edelman's Krispr, created to serve Kellogg's while avoiding concerns about its work for Quaker Oats.
Such an approach has never been tried in the programmatic space, but it could be useful since clients have growing "trust issues" around how their data is deployed through the data management platforms employed by trading desks.
A different-but-related business model, and one that may also be adaptable to trading desks, is the holding company practice of launching agencies to serve a single client. These companies can often expand to add new business. The golden standard in this category is Team Detroit, founded in 2006 from components of several WPP agencies all working on Ford Motors. It later added work for smaller clients such as Sports Authority and Carhartt.
(The cautionary tale in this category is Enfatico, WPP's single-client shop for Dell. It possessed agency-of-record status for Dell, but later lost it to Young & Rubicam and senior execs were reportedly let go.)
In the digital trading arena, you can see hints of this in the client-specific trading desks that are housed and staffed directly at the media agencies -- not trading desks. One example is the display ad buying hub WPP's Mindshare created with Kimberly-Clark, without the involvement of WPP's Xaxis trading desk.
Representatives of Accuen and Vivaki AOD have so far declined to comment about their plans. But, as Forrester analyst Joanna O'Connell put it, culture and values may prove as large a challenge as the business model.
"I think the introduction of ATOM into VivaKi had a definite impact on AOD," O'Connell said. "And it was a learning experience for both parties. But the big challenge, like any merger, is how to deal with different philosophies. That's tougher to deal with than combining technologies."
David Kaplan contributed.