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Xaxis APAC boss: Most clients are not capable of taking programmatic in-house

L:R O'Kane, Schleiben, Green, Tompkins, de Reijk

L:R O’Kane, Schleiben, Green, Tompkins, de Reijk

The APAC head of GroupM’s programmatic business Xaxis has told a forum in Singapore this morning that he does not believe most clients are capable of taking the programmatic buying of media in-house. 

Speaking on a panel at the ATS Singapore forum this morning, at the Marina Mandarin Hotel, Michel de Rijk said that while a small number of global brands might have the capacity most brands would struggle and find themselves at a disadvantage by trying to compete with the specialist programmatic trading desk of major media buying agencies.

“I think there are few, literally a handful of advertisers, who will do this on a global level,” de Rijk, who is APAC managing director of Xaxis, told the panel. “I think there is a big group under that who think they can do it, but actually they lack the expertise, the funding or the will to do it.”

“It will be like with search over the years. Some advertisers take it in-house, then they realise that it’s not as easy as they thought, and they bring it back to their agency.”

In recent years the marketing industry’s attention has been on whether global brands were willing and had the capacity to move programmatic media buying away from agencies and take it in-house.

While some brands, such as Keloggs, have done this de Rijk told the room that the programmatic industry should not fear this.

“We should not be afraid of advertisers trying to take (programmatic) in-house. I think (brand) also need to understand that hiring a programmatic trader, or partnering up with a DSP — that doesn’t make your in-house trading desk sufficient.”

“It doesn’t give you the right solution you want to have… I don’t think that the average FMCG is willing to invest in the local level in the right people to ensure you have the right inventory and data supply. So they might start doing it but they will figure out that it doesn’t work over time.”

De Rijk made the comments on a panel that included Exchangewire founder Ciaran O’Kane, AppNexus director of sales Kathryn Schleiben, Vivaki Singapore director Stephen Tompkins and The Trade Desk CEO Jeff Green.

His comments were also echoed by rival Tompkins who runs Publicis’s Vivaki Singaporean trading desk.

“Advertising is getting more complex not less complex,” argued Tompkins. “While I get there is a desire to do that and there is more data, more transparency, more control and there is a natural inclination to want that (by bringing it in-house).”

“This a global exercise (the likes of) Procter & Gamble can’t take it in-house in the US and then have a different strategy in other regions. You have to have funnel perspective, you have to have global perspective on everything.”

From the technology side Schleiben told the forum that brands who did take the step were risking finding themselves at a long term disadvantage if technological changes left them behind.

Earlier in the spring Tesco bought Sociomantic and I think it is going to be really interesting to see what they do with those people and that technology,” said Schleiben

“Obviously they are going to use it for Tesco and that addresses the way things are now but as a marketer how do you future proof your business?”

De Rijk noted that while a number of chief marketers had flirted with the idea of in-house programmatic trading he argued in the Asia Pacific region there were few CMOs who had executed the shift.

“I think a year or year and half ago we saw all these CMOs taking about working to bring it in-house and they were going to make it successful but I haven’t seen any of them,” he said.

“I have not seen anyone say ‘we’ve launch this’ or ‘this is the efficiency we have brought’, ‘it is working amazingly’ no they’ve been talking about it but none of them are at a stage of explaining how successful it has been.”

Nic Christensen 

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