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WPP to launch second agency trading desk to give clients bespoke alternative to Xaxis

Xaxis logo

Soon to face competition

WPP is set to launch a second agency trading desk that will give GroupM media agencies another option besides Xaxis to place their clients’ programmatic trading dollars, Mumbrella Asia can reveal.

The new entity, which does not yet have a name, is being designed to suit the growing number of advertisers that want more bespoke digital buying solutions, a company source informed Mumbrella.

The new trading desk brand will cater for more performance-focused advertisers and compete with Xaxis for what the company claimed earlier this year to be $750 million in automated digital media buys globally.

Like Xaxis, the new brand is an option for all GroupM agencies – Mindshare, MediaCom, MEC and Maxus – which form Asia’s and the world’s largest media buying force.

A launch date has not yet been set, but in Asia it is likely to be established in GroupM’s biggest markets – China, India and Australia – first, before rolling out across the rest of the region, as Xaxis did.

The news emerges only 10 months after WPP closed digital media investment firm Media Innovation Group after 24/7 Media, of which MIG was a part, was merged into Xaxis.

It also comes at a time when agency trading desks are coming in for increasing scrutiny for the practice of arbitrage – not disclosing to clients the margins they make on automated media trades. Xaxis has been a focus of much of this criticism.

Last month, Pete Mitchell, the global media innovations director for Mondelēz International, said that media agencies needed to “grow up” and stop arbitrage, otherwise risk losing programmatic buying business to other players.

When WPP rival IPG introduced its trading desk Cadreon in July last year, a press release explicitly pointed out that the new service did not arbitrage on media trades, which was seen by some as a swipe at Xaxis.

The perceived lack of transparency in agency trading desks has stirred debate over whether advertisers should take the programmatic buying function inhouse. In July, the APAC boss of Xaxis, Michel de Rijk, argued that most advertisers are not capable of handling the programmatic trading function themselves.

The soon-to-launch trading desk will sit alongside what is WPP’s fastest growing business. At the start of the year, de Rijk told Mumbrella that Xaxis had grown revenues by 700 per cent and increased staff numbers from three to just under 100 over the previous 15 months. Xaxis now has around 200 staff in the region.

Robin Hicks

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