The 'Private Trading Desk' Model

by , Dec 5, 2013, 4:00 PM
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Raise your hand if you know a brand that has influenced the ad technology choices their agencies make for trading on their behalf.

Odds are, none of you are actually raising a hand, but some of you should have them high in the sky. And if I had to guess, more of you would be raising your hand now than if I had asked the same question one year ago. And more hands will be up when that question is asked one year from now.

The topic recently came up in a conversation I had with TubeMogul's Keith Eadie about the recent Deloitte Technology Fast 500 list, and how programmatic companies dominated the top 100. During that conversation, I asked Eadie if brands were getting more directly involved in the process of selecting ad tech providers.

"Yes. There are a number of brands that…are deep into the process of influencing the selection of an ad tech provider," Eadie told me.

The topic came up again just yesterday, when Lenovo selected TubeMogul as its video ad buying partner. What's more, the personal computer company is now requiring its media agencies around the globe to use TubeMogul's technology. If that isn't "deep into the process of influencing the selection," then I don't know what is.

Not every brand is in Lenovo's position, but their decision brings up an interesting topic. Will more and more brands do what Lenovo just did -- make its agencies use a certain tech vendor, or else? (Okay, so I added the "or else" part, but it's kind of implied, isn't it?)

Brett Wilson, TubeMogul's CEO, believes brands making, or at least being involved in, the choice is a trend. He says it's a trend that "has legs," to boot.

This is where the narrative usually suggests agencies should strap themselves in because they will have to prove their worth in an automated world once the brands get their hands on the tech. But Wilson doesn't buy that, and I'm not sure I do either.

"The brands themselves are making the tech decisions, but the agencies are still very much involved," Wilson said. "We're starting to call that the 'private trading desk model.'"

But that raises another question: If brands are going to team up with their agencies in selecting ad tech vendors to create "private trading desks," where do the regular trading desks fit in?

Turn, a company in a similar position to TubeMogul in that it could be used as the tech source in a "private trading desk" model, is more or less neutral when it comes to the who uses their technology and why. 

"We sell software enabling anyone -- agency, trading desk, or brand -- to have access to the programmatic ecosystem," Paul Alfieri, Turn's VP of marketing, told me via email.

I reached out to ViVaki, operators of the Audience on Demand (AOD) trading desk, and asked if this was a potential problem for trading desks. Kurt Unkel, VivaKi's global president of AOD, doesn't seem concerned. In fact, he encourages the education of brands and agencies.

"Yes, many clients and agencies are learning more about programmatic and how to operate," he said. "It is fantastic and something we've been driving internally since inception."

VivaKi is part of Publicis Groupe, but having ties to a holding company does not guarantee a trading desk will be used. I've heard of at least one agency/brand combo with ties to WPP not using Xaxis, for example. IPG's Campbell Mithun launched its own trading desk earlier this year despite the presence Cadreon, the trading desk from IPG Mediabrands.

One industry expert thinks trading desks will always matter and have importance. "They'll shift and always be relevant," they said.

I'm of the same belief, but I definitely think there's something to be said for this "private trading desk" model, and it will be interesting to watch how the industry reshapes itself as brands get handsy.

"Shaking hands" image from Shutterstock.

1 comment on "The 'Private Trading Desk' Model".

  1. Christopher Brinkworth from TagMan
    commented on: December 5, 2013 at 4:57 p.m.
    It makes sense right? That clients would feel more comfortable with a model where holding companies / agencies work on a transparent margin, and the client retains more control. I think this is an upward trend for the whole stack (Data/Tracking/Attribution etc) and why Accordant Media, Infectious Media Ltd & Unbound et al are thriving. I guess negotiation on further fees for 'trading expertise' and bolt-on 'owned/earned' products like data, analytics etc would then be a negotiable/optional when pitching out business/reviewing contracts. I'd love someone with more day to day experience than me (I've been in Tag Management too long recently), to help explain where the Xaxis (RIP 24/7) model would fit here though, if this trend continued upwards...

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