GroupM global digital boss says Xaxis ‘completely transparent’ and defends content sharing play
GroupM’s chief digital officer Rob Norman has told a forum of members of the Interactive Advertising Bureau (IAB) that its agency trading desk is “completely transparent”, while also declaring that publishers and rival agencies had nothing to fear from its push into the recommendation space with Plista.
Speaking at an IAB event yesterday Norman told the audience the criticism of Xaxis over arbitrage, where online ad inventory is sold at a higher price than it was bought without disclosing the original price to the client, comes down to a misunderstanding around transparency and disclosure.
“The first thing is I would say is Xaxis is completely transparent,” said Norman. “I should define what transparency means. Transparency means that you have a contract between two parties and the parties adhere to terms.
“When people talk about transparency what they are really talking about is disclosure, which is not the same thing as transparency. I think it is important to recognise that.“What we believe we are doing is selling packaged outcomes to our clients and if we are transparent about it then the disclosure issue is secondary,” he said “We have over 3,000 what we call opt-in contracts around the world. Clients who specifically read the terms of the Xaxis business model and make a decision to sign up or not, to be part of the world that Xasis is.”
I need to get back to work selling packaged outcomes at a 200% more than I paid for them
I disagree that the disclosure issue as you call it is secondary. Clients want to know how their advisors make money as differing incomes by channel can impact on the objectivity of advice given.
“The Xaxis model does indeed depend on nondisclosure” Nuff said.
What is this drivel? A media group that earns a better margin with a specific channel lacks all objectivity.
Disappointing hypocrisy from an otherwise very bright and insightful bloke.
Software (incl Google) is eating the world and the marketing software stack is about to wipe out the digital cash cow from agencies. Arbitrage and agency-as-publisher short term thinking will be a strategic error the industry looks back on one day.
“I don’t think there is any intention by GroupM to suck the data of the market out of clients,” – Yo, Rob, you either know or you don’t! Come on none of us really believe you anyway.
Disingenuous at best. There’s clearly a mandate on GroupM’s part to force publishers to accept Plister and and Xaxis in a trading arrangement. Enough said.
Have to admit the M are amazing at leveraging their clients ad spend to benefit their own interests.
If you’re publisher X and they come to you on one hand with an upfront deal, and on the other hand as a mandate asking for inventory for the DSP and integration for the content rec software are you really going to say no?
This has been allowed to happen as the media have become so weak at generating rels with actual brands and clients.
A packaged outcome with an undisclosed margin at the least causes misalignment between what’s best for the client and the agency.
Some trading desks prefer to sell partnerships over packages, which sees alignment between client and agency goals.
We’re really transparent. Except when it comes to your money.
Said the snake oil salesman
If the MGroup has 3,000+ clients signing contracts agreeing to non-disclosure terms, so that they can buy cheap audiences, (and Omnicom, Publicis, Aegis also having thousands of customers doing similar) – isn’t all this hand-wringing over non-disclosure of agency trading desk profit margins a moot point?
If you dont like the model or the terms of business someone is offering, dont buy it.
No one is FORCING clients to spend money with ATDs, or doing it without their knowledge.
To all the clients complaining about non-disclosed profits – dont sign the contracts.
To the clients who have signed the contracts – if you are not getting a large cost advantage over normal display – hold your agency to account and go back to buying display ads.
Fucking simple.
And can you please stop clogging the internet with your comments about why its unfair not to know how your supplier makes money down to every last cent, because you know, thats your god given right when you pay them one and a half percent commission and on top of that sit on their invoices and pay them 3 months late.
Fucking dickheads.
Hmmm … a healthy dose of pragmatism. Well done.