Q Thoughts

What’s Next for Agency Trading Desks?

By Bill Santare, Client Strategist, Owneriq

Publicis Groupe’s recent announcement that they essentially disbanded their programmatic trading desk, Vikaki, has marketers wondering about how this impacts the future of the agency trading desk model. Will other agency trading desks be able to continue operating as they are, or is the beginning of a trend? What can other trading desks do to prevent heading down this path?

The reason agencies have been so focused on building out these trading desks is to help drive increased revenue for the parent holding companies. It’s helpful to have the agency teams and the trading desks in the same building for planning purposes, but the main benefit is keeping a portion of the media buys in the holding company’s “family,” rather than paying an external partner to manage everything. Publicis has done a great job at positioning this move as a conscious decision to strengthen their agency teams for the good of their clients. While it’s difficult to argue that this move won’t help bolster their agency teams, it’s more likely that this was a reactionary move, rather than a proactive decision.

As advertisers are demanding more transparency around pricing, margins, fees, etc., it will become necessary for trading desks to remain lean in order to stay highly profitable.  Technology makes it easy for a small group of experts to handle a large number of accounts. Additionally, trading desks will continue to increasingly benefit from partnerships with strategic technology companies to help them maximize success. These partnerships will allow the trading desks to get external support  for not only the management of programmatic buys, but  for reporting and insights as well.

For advertisers, there are some potential pros and cons of having the programmatic trading done by members the agency teams, as opposed to having a separate trading desk. If the traders become a part of the agency team, it allows more transparency into pricing, as well as insight into exactly how their campaigns are being run behind the scenes. One potential obstacle revolves the trading desks’ higher level partnerships, , and how a move like this would impact those. An agency trading desk that handles several large accounts has much more leverage in those negotiations than a trader who is an agency team member. It’s likely that the agencies will begin to renegotiate these types of deals, but this process may take time.

Only time can tell how this move will impact the holding company, the agency teams, and the advertisers themselves. In the meantime, companies like OwnerIQ will continue to strengthen partnerships with both trading desks and agency teams to help provide the support needed to achieve success.

Categories:Posts from 2015


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