Sparks Fly Over Agency Trading Desks at OMMA AdNets

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ADOTAS – Lovers of drama and the ad tech space are in for a treat, as a panel from the OMMA AdNets conference transcended from being a snorefest in which the same talking heads make the same statements they make at every conference into a tension-filled debate over the role of agency trading desks and whether their relationships with agencies represents a conflict of interest. Though it gets downright ugly at times, it’s well-worth watching all 43 minutes of the video.

Though it’s a pretty contentious affair from the start (even the moderator seems testy!), it really heats up around 10 minutes in when Triggit CEO Zach Coelius claims — as a follow-up to a question about how agencies allocate spending to their trading desks that’s never really answered — that clients are not actively involved in the media-buying review process and are therefore unable to compare trading desk performance to independent services like DSPs.

Taking it a step further, he seems to be suggesting that agencies are taking advantage of advertisers’ lack of knowledge about audience buying to score more client dollars through the trading desk, which may not provide the best service.

The response from Mac Delaney, vice president of brand relations for VivaKi’s trading desk Audience on Demand? “Bullshit.” So much for this being a family-friendly conference.

Trading desks seem to have tripped into a pool of controversy lately, especially after a comprehensive piece on the space by Digiday’s Mike Shields. But ad tech companies and agencies have been slinging mud at each other for a while — remember this would-be inflammatory TechCrunch piece?

There are a lot of rumors circulating about agency mandates regarding sending traffic to trading desks and agency media planners being financially compensated for pushing business to the trading desk. Don’t forget claims that clients are being overcharged (or charged twice) for planning and the execution of buys.

The area gets particularly gray as trading desks, originally designed to circumvent ad networks that were gutting agency margins, supposedly operate independently. Then there are hush-hush deals whispered about, such as Google imbuing trading desks with DSP technology in exchange for increased media buying through Google outlets.

Unethical? Maybe, but kickbacks have long been ignored in advertising if the performance speaks for itself. (What was that about not fixing things that aren’t broken?)

The “controversy” can be summed up in a single question: Are advertisers (particularly big brands with big marking budgets) best served by having agencies act as both media planners and media buying platforms? Or as Coelius puts it, serving as both “agent and vendor.”

“I suspect that as clients start to understand this conflict and as the media dollars that flow through trading platforms increase, quite a few of them will ask their agencies to choose one side or the other,” he predicted in Digiday.

Targeted

Delaney and VivaKi may beg to differ. Digiday Editor Brian Morrissey commented that Delaney’s panel “performance raised some eyebrows on Twitter since it’s probably not the image VivaKi wants to project.”

Or was it?

Right before Triggit made headlines by partnering with Amazon, a friend in PR asked ad tech journalists including me what companies came to mind when he said “DSP.” Apparently Triggit was hardly mentioned — but industry people are definitely talking about Triggit now, and I’m sure some brands have nudged their agency reps and said, “What’s the deal with this Triggit company? Are we working with them?”

Triggit is not the biggest company in the space, though their technology appears to be strong and Coelius has proven himself a thought leader on various panels (though his ever-present red t-shirt has made less of an impact on the fashion world). It also appears he’s made some enemies.

Delaney seemed to be gunning for Coelius from the start; he mocked Triggit’s size and experience — “When did your company rebrand? Three years ago?” (Coelius calmly replies that Triggit has been in online marketing for six years.) Reading between the lines, Delaney is pretty much throwing VivaKi’s weight around — it has the experience, manpower and scale that major brands want and some dinky tech startup can’t match.

So why listen to its CEO?

Coelius’ Twitter account suggests he was taken by surprise. “I have not idea what it was. It was super weird. I don’t know the guy, so it’s hard for me to venture any thoughts,” he commented to Alex Calic, CRO of the Media Trust.

What a Brand Wants

As more money flows into the audience buying space and the mechanics are more widely understood, brands are going to demand more-detailed justification of ad spend and better transparency in agency practices. They’ll be far more interested in how much audience was bought through what platform, and they’ll want to compare performance across various third-party DSPs. The technology to do this quickly already exists — I was fascinated when Turn’s Philip Smolin walked me through a demo displaying how its data management platform analyzed and predicted campaign performance across a swath of DSPs and ad networks.

Clients won’t care about internal incentives for media planners to go through an agency trading desk as long as campaigns are performing and they don’t believe they’re being overcharged. Results talk.

In fact, a GroupM representative commented to Digiday back in May that it encouraged its agencies to use WPP’s MIG trading desk because the platform becomes smarter as more traffic flows through it, which can be seen as adding value to clients.

The rep added:

“We have not as yet incentivized individuals for driving volume to our own trading platforms but believe it is not an inappropriate approach and would be consistent with our efforts to incentivize our people to create value for our clients.”

Several of the panelists at OMMA are right in saying it’s still early in the audience-buying game. But the panel flare-up suggests the debate over trading desks might get a lot bloodier… And, rather than whispers about so-and-so being full of shit to gossip-hungry journalists like me, the rancor might become public.

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