Programmatic as an arbitrage model - the myth dispelled

We don't just buy inventory at one price and sell it on for another, writes Xaxis' UK managing director.

Programmatic seems to be getting a bad rap at the moment due to the scourge of online ad fraud, brand safety scares, and to muddy the waters further this week the business model has been attacked too. It can be considered a ‘dark art’ to those who are not living-and-breathing it on a daily basis – and the rapid rate of technological change makes it a challenging part of the industry to keep up-to-speed with.

So let’s set the record straight from a Group M standpoint: Xaxis is our programmatic media company focused on driving measurable results and outcomes for marketers. It offers advertisers unique audiences, the highest quality reach in the market as well as strategic insight and analysis to inform our clients’ understanding of their customers and future marketing strategy.

All of this is possible through a history of substantial forward-looking investments, acquisitions and developments over the last decade to ensure we have the market-leading technology platform. When this is combined with the highest quality addressable media, unrivalled audience data and analytics, as well as the depth of expertise, knowledge and operational performance we’ve honed over six years since our inception, our clients get much more than the purported simply marked-up inventory.

Our proprietary technology, which is an on-going investment, has a huge number of layers. These include audience creation and activation, Artificial Intelligence-powered optimisation, media intelligence for analytics, campaign visualisation for centralised, real-time and actionable campaign insights which all benefit our clients. 

Xaxis audiences run across more than 2,000 interests, predicted interests and intent segments (ComScore validated for accuracy). It can create bespoke look-a-like models for clients and socio-demographic segments, as well as custom models composed of all of the above, which is all specifically tailored to an advertisers needs. 

Different options work for different people, each offering different levels of value. The power of choice is inherent

As you would expect from being part of Group M, we work very closely with the top media owners in the UK to secure preferential access to quality inventory at guaranteed best-in-market prices. This delivers viewability levels that far exceed industry averages, minimal brand safety risk and fraud risk independently measured by Media Ratings Council-accredited companies (sub 0.5% which is at least ten times less than the industry average).

Our quality and risk management is second to none, with DTSG UK Brand Safety accreditation from the outset and we are working towards ISO 9001:2015 Quality Management certification this year. This is all because of our stringent protocols around our robust blacklists and whitelists, manual seller and domain vetting, constant audits on all inventory sources, as well as the standard range of content verification controls. 

Even in this modern programmatic era of marketing, people remain as vital as ever to our success. Our teams create tailor-made marketing strategies based on advanced analytical models to better enhance media buying and to understand audiences across platforms. We have a highly skilled team of experts dedicated to meet and exceed campaign goals and objectives. Our analytics team delivers detailed customer intelligence to help connect and understand what consumers are doing now and what they will do next.

So to label us as an arbitrage model is wholly inaccurate. We don’t just buy inventory at one price and sell it on for another, Xaxis offers an all-inclusive outcome-driven commercial model. Our clients pick this route because they genuinely believe that it delivers the best outcomes for their advertising campaigns (maximum performance and value for money across brand, engagement and direct response KPIs – results that are measured). 

Having mastered data, Xaxis has turned its focus to Artificial Intelligence as the next great driver of marketing results 

If the client chooses to pick our Xaxis ‘all-inclusive’ model everything is agreed up-front as part of the contract and signed off by the client on each media plan (N.B. Xaxis is therefore benchmarked performance and value-wise with other partners on the media plan). However, if a client decides that this isn’t the right option for them, our parent company GroupM offers an itemised programmatic option. This has all of the costs (data, technology and inventory) laid-out line-by-line which is passed directly to the advertiser, with a fully transparent fee added for managing the service.

It’s the equivalent of buying a quad play bundled telephone, broadband, mobile and TV package for your family home or paying for each service separately. Different options work for different people, each offering different levels of value. The power of choice is inherent.

Having mastered data, Xaxis has turned its focus to Artificial Intelligence as the next great driver of marketing results. However powerful our platforms are, and however talented our team of 75 programmatic media specialists in the UK are, the future lies firmly in AI. We believe that machine learning in combination with human expertise, skill and intuition adds business value in spades to our clients. Don’t take my word for it - the results tell us so - and validate the on-going trust our clients have in us.

Harry Harcus is UK managing director at Xaxis; part of Group M

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