'We’re trying to have a common language' - Xaxis CEO on culling inventory partners, and working with walled gardens
Xaxis’ global CEO Brian Gleason is in the process of integrating the GroupM outfit’s recently acquired assets after assuming the role from Brian Lesser, GroupM CEO, North America, as programmatic media buying comes to the fore.
In this, the second installment of a two-part interview with The Drum, he discusses how clients’ desire for transparency has prompted Xaxis to take upfront risks over promises about viewability, how this necessitated the need to cut the amount of suppliers it works with, plus dealing with walled gardens.
The Drum: Xaxis announced its preference to deal in more closed marketplaces instead of open exchanges back in 2014. Can you explain more about this and what you've done to implement this?
BG: This goes back to the whole transparency thing. At Xaxis, we have to be transparent about where the ad was run, whether or not it was viewable, and then to surface all of that data [so it can be then be shown to a client]. One of the ways we do that is to provide dashboards [for clients] so they can look at it and see how a campaign is performing.
Back to the whole point about transparency and around viewability, until we can narrow the 16 vendors’ [methodologies] on the market down to about three, then we’ll have to continue to do that.
The Drum: What is Xaxis doing to help bring that situation about, and how many less players are you doing business with now?
BG: The first thing is to work with three different vendors that are 100 per cent viewable: Double Verify; Integral Ad Science and Moat.
The we go out to the market, and say ‘this is how we’re going to do things’ [i.e. this is the methodology we’re going to work with]. This then serves as a bridge between the brands and the publishers in terms of reconciling any differences when it comes to campaign reporting.
The second is to eliminate any fraud, so we work with publishers to put a tag on their page that can eliminate it before it even comes into our marketplace.
Viewability and fraud take a lot of resource to protect [from detection], and when you work in a more closed trading environment, then that’s like your security system because you have a more limited number of players. The more variables I can control, then the more I understand, and protect myself from fraud.
So when we decided to work in more secure environments, we cut 90 per cent of the inventory we worked with last year. For instance, in the US with video, less than five per cent transacted on a viewability metric in December 2014, and when it came to 2015, that was somewhere in the region of 85-to-90 per cent.
We took some risks by securing inventory on an upfront basis, something we always do, and then it became difficult to deliver the inventory [for clients] on those metrics [which it had promised them]. Hence the decision to work with less inventory partners.
The Drum: How have these stringent requirements affected your relationship with publishers?
BG: For one we’ve had to have a lot more direct relationships with the publishers. So with Xaxis media products, you have a lot more high-impact video ad units, which is useful when you have an upfront model.
That’s helpful as we now have Plista, which is a recommendation engine that sits on the publisher’s page to select appropriate inventory, then we have Light Reaction, which does likewise for mobile inventory.
This broadens the relationship, and is helpful for everybody in my opinion when you are working with the best inventory suppliers. You don’t have to work with thousands of suppliers, if you have 300-400 of the best.
The Drum: Walled gardens are often complained about when it comes to the internet’s major inventory supplies (i.e. Facebook and Google, etc.). Can you give us Xaxis’ take on them?
BG: What we’re trying to do is to have a common language, but if you look at siloes [such as the Facebook and Google ecosystems], they’re saying: ‘you can only speak our language’, and that’s confining in many, many ways. So when you get a situation like that you have to be a translator that goes across the top of all those ecosystems.
Facebook and Google are phenomenal inventory sources, and while I understand concerns on all sides around things like privacy, if we don’t have an understanding on all sides, then we’re going to end up with the fragmentation, just like we have with ad viewability.
It doesn’t matter if you have the smaller players signing up to it. Until you have critical mass it’s a challenge, for Facebook and others to go down that path, it would be a great improvement.
Click here for the first half of the series where Gleason talks about the rationale behind the growing prominence of Xaxis within the GroupM fold.