Trading Places: WPP Merges Xaxis, 24/7
The advertising technology space has been ripe for consolidation for some time now, with the telltale signs burgeoning over the first half of 2013. Since July -- starting with the Publicis/Omnicom deal -- news of mergers and acquisitions in the space has often been precipitous.
Today, WPP announced the merging of its largest trading desk, Xaxis, and 24/7 Media, a digital marketing technology company. Much of Xaxis' audience-targeting capabilities spawned from 24/7 Media's technology; the companies have since worked as partners.
WPP claims the merged company -- which will operate under the Xaxis name -- will be the largest programmatic media and technology platform in the world.
By the sound of it, WPP has merged the two companies to simplify the media-buying process for programmatic traders, which is more or less why talk of consolidation sprung up in the first place.
Martin Sorrell, CEO of WPP, said in a statement that the merger will give WPP "deeper data connections and streamlined technology resources," which essentially means that WPP has put their data and technology resources under one roof; it's an in-house consolidation.
Brian Lesser, current Xaxis CEO, will continue as CEO. David Moore, chairman and CEO of 24/7 Media, will become chairman of Xaxis. Moore will also serve as president for WPP Digital.
Lesser stated that the merger of 24/7's engineers and data scientists with Xaxis' programmatic media specialists is the next "natural" step, especially when considering the connection
and history the two companies share. Brian Gleason, Xaxis' managing director, North America, told RTM Daily that over 240 new engineers will now be working for Xaxis as a
result of the merger.
On the buy-side, Xaxis' new audience-targeting platform will include built-in data management technology, a search marketing platform and a marketplace for programmatic media-buying of display, online video, social, mobile, radio, out-of-home, native and connected TV inventory. The deal also brings a new pool of inventory to Xaxis.
Moore claims publishers will now have the ability to eliminate middlemen by connecting directly with media buyers through Xaxis. In addition, the added inventory should lead to higher demand.
The deal is expected to close in Q1 2014.
The new Xaxis claims it will manage 2 trillion global impressions per year, equating to over $750 million on behalf of 2,700 clients. The 24/7 Media unit Xaxis will be absorbing has over 500 employees and 18 offices around the globe, including spaces in North America, Europe, Asia Pacific, and Latin America.