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WPP GroupM Programmatic

GroupM inks ad stack deal to bolster social insights

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By Ronan Shields, Digital Editor

July 21, 2015 | 5 min read

WPP’s GroupM has updated its ad tech stack after striking a deal with marketing services provider Networked Insights, to improve efficiencies in how its staff plan and implement client campaigns, in a deal which arguably points to a reversal of the trend for brands to build more direct relationships with ad tech providers.

GroupM logo

The move means GroupM employees from media agencies such as Mindshare, or MediaCom can employ insights gleaned from audiences’ posts on social media in order to better plan, or implement their clients’ campaigns, as Networked Insight’s Kairos platform gives them access to such trends in real-time.

For instance, GroupM staff can use the insights – extracted from over 560 million social media postings each day – to decide on where to focus their marketing efforts, such as identifying potentially new addressable audiences, or where to direct clients’ media spend.

The three-year deal was announced yesterday (20 July), and although the pair declined to publicly disclose the precise figures of the deal, the Wall Street Journal did report that GroupM will pay the social analytics firm “seven figures” on an annual basis.

The deal with GroupM also counts as the first of its kind for Networked Insights, which had previously adopted a strategy of going directly to brands, and then convince them to license the technology directly (which effectively bypassed agencies).

Speaking with The Drum, Gerry Komlofske, Networked Insights' president and chief operating officer, said the outfit will continue to pursue direct relationships with brands, but did add that it had found “like minds” in GroupM, hence it would not attempt to partner with other agency groups, such Publicis Groupe, or Omnicom outfits.

GroupM, which houses a number of WPP’s media planning agencies including MediaCom, MEC Interaction, Maxus, is estimated to spend almost $100bn each year on advertising space, with its ad tech hub Xaxis (which matches media buyers with their desired audiences using programmatic media-buying technology and audience data) often cited as one its main drivers of growth.

However, many agency ad tech hubs have come under fire in recent years, with detractors citing issues around pricing transparency, plus suspicions over whether rival clients’ data was being used to optimise each other’s campaigns, led several brands to eschew Xaxis’ offering, including Kimberly-Clark and Unilever.

The extent with this unease over agencies’ use of ad tech was further highlighted in a World Federation of Advertisers (WFA) report which quizzed brand-side marketers on their attitudes towards agencies’ trading desk business models (see chart below), and further advised brands to consider more direct contractual relationships with ad tech and data service providers.

The WFA found widespread concern over agency networks' trading desks

The report goes on to advise: “Consider taking steps towards taking back control from the Trading Desk. While the brand trading desk model provides maximum protection and visibility it can be time intensive and resource heavy.”

However, agency staff also observe that many brands are beginning to realise just how complex and labour-intensive a task it is to both build and maintain an ad tech stack, with many of those that have considered taking their ad tech in-house performing a U-turn.

Speaking with The Drum, Harvey Goldhersz, GroupM’s chief data and analytics, said: “We agree that strategic media planning and investment are more complex than ever, and thus the role of media agency is more important than ever. The u-turns referenced are no surprise.”

He added: “Even for the world’s largest advertisers with significant scale and resources, their ability to replicate the technology, media marketplace insights and buying power of a scaled media agency such as GroupM would be challenging.”

Goldhersz went on to say this is the reason behind GroupM’s ongoing investment in its own tech and data stack (at a much “greater level than any client could”), although he hesitated to draw conclusions on what the deal with Networked Insights means for the wider “in-housing trend”.

“The deal shows that Networked Insights will realise significant upside working at global scale with the world’s leading media investment group, and that GroupM clients will gain competitive advantage via ever richer data we are able to bring to bear on their marketing opportunities,” he added.

Speaking earlier with The Drum, Mondelez media director for Europe, Gerry D’Angelo, explained the company's thoughts on taking its online ad buying activity in-house.

He said: “I don’t think we’re in that position where we want to bring as much as possible [in-house]. I don’t think we’re there. At the same time I think we’re clued up enough to understand that the approach could be a lot better. It could be a lot more efficient. It could be a lot more transparent. We’re somewhere in the middle.”

WPP GroupM Programmatic

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