Commentary

Xaxis CEO Says His Agency Trading Desk Is Not A Trading Desk

by Richard Whitman , Columnist, July 22, 2015

So we all know that an agency tracing desk is a place where agencies centralize their programmatic buying, right? Well, not according to the CEO of Xaxis, WPP's programmatic media operation.

According to Xaxis CEO Brian Lesser, “We are not a trading desk. A trading desk is a service an agency provides that is disclosed and acts as a filter for all programmatic media. If I’m an advertiser, and I spend $10 million in programmatic, I would rely on a trading desk to advise me on that $10 million, like what DSP to use, inventory, and data services.”

Lesser argues that Xaxis is really a full-fledged media company, adding: “We invest more in technology than any other agency, so when we are compared to Publicis’ AoD, that’s like apples to oranges. That’s a trade desk, they have no internal tech, they rely solely on third-party tech. They are happy to surface the cost of their inventory because they don’t trade the way we do. I think as a result, they don’t provide nearly as much as we do.”

Pretty soon we'll start calling trading desks media departments. Oh, wait.

agency, trading desk

3 comments about "Xaxis CEO Says His Agency Trading Desk Is Not A Trading Desk".

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William Lederer from iSOCRATES, July 23, 2015 at 10:34 a.m.
Brian and his team at Xaxis have done a GREAT job for WPP and its shareholders delivering peerless, scaled results while innovating all the while. The global programmatic media and marketing industry would be a small fraction of what it is today if it did not have the Xaxis vision and team, the support of GroupM, and a large number of important early adopting advertisers as clients.

In a market awash in excessive, often undifferentiated inventory, data and technology, Xaxis has chosen to risk its own capital taking inventory positions and investing in technology. Xaxis should be commended for demanding higher quality and inventory workflow standards and providing critically needed market liquidity. The latter contribution is no small thing.

However, by no means is Xaxis a media company nor is it a captive ad network as some may protest. Buying and selling audience does not make one a media company, creating and/or distributing content and/or building/aggregating impressions without paying for them defines "media". Xaxis is not an ad network due to its risk-bearing nature and its commercial vision.

Wall Street is very clear semantically in its definition of trading desks that bear inventory risk: they are called proprietary trading desks. If "prop traders" make continuous markets in the same type of inventory, they are called "market makers".

Make no mistake: Programmatic media needs proprietary trading and market makers like Xaxis. These critically important players drive innovation and greater market efficiency while providing sorely needed liquidity. But, to confuse an ad trading desk with a media company is to confuse an agricultural commodity brokerage with a farmer. In an alredy confused semantic programmatic jungle, let's call a risk-bearing spade a spade.

Expect more Xaxis-like prop traders and market makers in future, whether linked directly to agencies, publishers, exchanges, ad networks, large marketers, or speculative risk capital.
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Benny Radjasa from Armonix Digital, Inc., July 23, 2015 at 11:17 a.m.

Quite a few of Xaxis senior leaderhip at one point had worked at 24/7 Media. 24/7 Media corporate page in Linkedin now says, "24/7 Media is now Xaxis". So its an evolved ad network of some sort :-)

Ad networks has owned/operated media sites and owned proprietary technologies also in the past, it is not new. But the negative conotations that one has to endure being label ad an ad network in this age, no one would be caught dead wearing the ad network label.

Seth Ulinski from Independent Analyst and Consultant, July 23, 2015 at 12:55 p.m.

It's easy to categorize Xaxis as an ATD (I did until recently). However, the fact that Xaxis has invested in proprietary IP and maintains a sales team (not just upselling existing clients) puts them in a different category. And while some may be calling for transparency, Xaxis represents a different biz model, carrying different levels of risk/reward, etc -- in some regards similar to Criteo, which coincidentally has been labelled the "golden child" of ad tech given its continued growth and profitablity.

At the end of the day, it all goes back to the needs of the marketer and which delivery model suits them best.