WPP launching second trading desk because Xaxis ‘hit barriers’ says Omnicom trading chief

Barry Cupples


Omnicom Media Group’s global head of investment has said that the planned launch of a second agency trading desk by WPP, revealed by Mumbrella last week, could have come about because the agency giant “hit barriers” with its first trading desk, Xaxis.

In an interview with Mumbrella last night, Barry Cupples, who is a year into the top investment job at OMG, said it was probable that Xaxis’ “undisclosed model”, where the agency does not reveal the margins it makes on trades, has prompted WPP to create a second option for clients.

Cupples told Mumbrella: “I don’t have the inside track on what GroupM are doing, but it’s clear that they’ve hit barriers with Xaxis’s undisclosed model.”

“With our model it’s been clear to clients how we operate and the way in which we are developing to drive value for them. I feel we got it right the first time,” he said.

Cupples said that the arbitrage issue, which has been targeted by clients such as Mondelēz marketer Pete Mitchell in recent weeks, is just starting to “catch fire in Asia.”

The arbitrage debate emerged in the US last year, with the likes of Ford, Procter & Gamble, Unilever and Kimberly-Clark pulling funds from agency trading desks over a perceived lack of transparency over pricing.

Cupples said: “It [arbitrage] is just catching fire here. But that doesn’t mean the issues are any different. They’re the same.”

“Clients need to be assured that what they’re buying is of high quality; they don’t want to be involved in fraud, and by that I mean a lack of visibility [of online ads].”

“Another issue is that measurement is not keeping pace with how quickly the software is advancing in programmatic,” Cupples added.

WPP’s second trading desk, which does not yet have a name, is being designed to suit clients that want more bespoke digital buying solutions, a company source informed Mumbrella last week.


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