You could say that the foundation of Xaxis is an example of how WPP is reacting to the power of advertising moguls like Facebook and Google. WPP thinks that it is only through sheer scale and the use of massive amounts of data that you can stay relevant to advertisers on the internet today. An interview with CEO, Michel de Rijk and two of his colleagues, Henry Stokes and Rohan Philips, provides a closer look into Xaxis programmatic kitchen and the way they distinguish themselves from other players in the area.
What the heck is Programmatic?
Programmatic advertising is developed to automate the decision-making process of media buying, including targeting of specific audiences. Programmatic ads are placed using artificial intelligence (AI) and/or real-time bidding (RTB) for online display, social media advertising, mobile and video campaigns. What we also see is that this is expanding to traditional TV advertising marketplaces.
To enable the automation of targeted advertising you need data and have access to media channels. The challenge today is to get data that allows you to effectively target certain segments or better, individuals in an audience. There is a lot of data available but not all of it is of good quality or useful ‘as-is’. The second challenge is formed by the walled gardens of Facebook and Google. They use the data they have primarily to drive their own business.
GroupM and WPP launched Xaxis in 2011. They want to create the world’s largest database of individuals, providing the typical insights about these individuals, such as demographics, financial, purchase and buying behaviour.
Based on this data and the media channels that Xaxis has access to, advertisers can reach audiences in many places and in a highly targeted manner. At least that is the theory. We asked Michel what the challenges of the ecosystem are. He replied; “As you are aware there are still some doubts about the effectiveness of digital advertising due to fraudulent practices like click throughs generated by bots or scripts. This is a problem that can only be fixed if everyone in the ecosystem does his or her part to not encourage ad fraud. One aspect of this is to a change in the mindset of measurement metrics of a campaign. We should aim to go beyond measurement that is click-volume driven.”
When asked what Xaxis does, the first thing Michel mentions is that they are a media agency. He adds immediately that development of customer propositions and collecting audience data are also 2 important activities to them. This would technically make them an advertising agency. But they started out with selling media and did not consider themselves being an agency.
So what is Xaxis’ approach today?
We are dealing with walled gardens, due to the fact that Google and Facebook tend to keep audience data to themselves. We are convinced that the platform, i.e. the technology, is not the most important part of our proposition. It is what you do with it.
So how does Xaxis use the data?
Michel says that collecting data from a wide range of sources and then cross tabulating it is a way of providing a counterbalancing to the massive audience data sets that Facebook and Google own. “We aggregate data across various industries. Using that data and delivering advertising successfully is also about discovering new audiences. In addition we try to innovate by offering new features like GPS-based geo-fencing and incorporating new media channels such as connected TV and Spotify Radio. We do apply what you could call behavioural science in order to understand customers.”
Ad blockers and data
The big topic today in online and specifically mobile advertising is the rise of the ad-blockers. Does Xaxis see this as a threat?
Henry explains that advertising needs to be more relevant. “The problem today is that advertising is often disrupting an experience or there is simply too much of it. That is the reason why ad-blockers exist. It is the audience telling us that there is too much advertisement. Most of it is served up at either the wrong moment or to the wrong audience or both. We thrive to develop advertising that is relevant, well targeted and well timed, through the use of data. Today we might not completely reach that goal but we working tirelessly on it.”
But apart from producing relevant advertising, does the effectiveness of a campaign not depend directly on the underlying data?
Rohan explains that Xaxis invested in Turbine, a proprietary Data Management Platform. “As Michel mentioned we collect and aggregate data from various industries to improve our performance. We also see independent measurement improving. Measurement is very important. But measurement is still very much about what happens after the click. We prefer understanding the path leading up to the click. You would expect clients to allow better tracking of conversions but most do not allow does or have legacy systems that cannot deliver that information. The challenge on the publishers’ side is that we have e.g. 5 publishers out of which 4 allow measurement and 1 doesn’t. But comparing the measurements on the 4 publishers that allow this, comes with its own problems.”
“Comscore is leading in this area and it helps us understand how well we do our job.”
The mother ship
Xaxis is part of WPP and as mentioned in the beginning, an example of how WPP copes with the changes in an ever more digital world. Creating a relevant digital value proposition requires cross-agency work within the group we would imagine.
Michel explains that he has KPIs that track his performance in the area cooperation within the group in terms of horizontal cooperation. “Sir Martin Sorrell is very clear about the future of advertising and media. He positioned the acquisition of TNS very much as an entry of WPP in the area of data and analytics and the group continues to focus on mobile, content marketing and tech. We are tasked with helping our clients to innovate their advertising.”
What does the future look like?
Michel explains that inventory wise it really is a question of who becomes the standard and that has to do with scale and performance at the same time.
“The walled gardens created by the likes of Facebook and Google can be overcome if we gather enough data and have inventory on all other online assets. We will keep innovating. One of the things we are doing now is to create ads on the fly that are optimised for different profiles. We call it self assembling ads. This is an example of how we try to combine creativity, technology and data with the final objective of keeping advertising more relevant and contextual. That is the only way we can fight e.g. the ad-blocking phenomenon. Another interesting development is that we see premium media owners opening up to programmatic. That again means that we are getting access to communities that might respond very well to advertising of premium products.”
Editor: Matthieu Vermeulen