Recently, I attended the IMC Forum organised by WFA, which various brands (clients) get together for a session talking about various marketing topics.
One key topic is on programmatic buying, and more specifically on Trading Desks.
So what exactly is Trading Desks? There is a good whitepaper by Forrester defines as follow:
A centralized, service-based organization that serves as a managed service layer, typically on top of a licensed demand-side platform (DSP) and other audience buying technologies; manages programmatic, bid-based media and audience buying. Works as an agency’s internal “center of excellence,” supporting agency teams wishing to tap into this new buying model on behalf of agency clients.
Sound alien? Basically, it’s a team that setup to help clients to buy and manage media through programmatic buy, rather than traditional form of media buying, through publishers. This team can be managed within client’s media agency, known as Agency Trading Desk (ATD) (For e.g., for Mindshare, Xaxis is the agency trading desk that help to do programmatic buy), or independently setup, known as independent trading desks (ITDs).
A survey results on Trading Desks was shared during the forum and here are the executive summary :
- Majority (81%) of respondents are using agency trading desks while a minority (11%) are using independent trading desks
- But satisfaction with ATDs (transparency and charges) is significantly lower than ITDs
- Trading desks currently accounting for 6% of total online display media budgets on average, but accounts for much higher share for some membersTrading desk use of client data a concern for 54% of respondent but only 30% have made provision in contracts to access or secure it
- Overwhelming majority (83%) feel trading desks are less transparent than ‘traditional’ way of trading
- And 54% been asked to sign separate contracts to the rest of media activity
- Just 13% satisfied with level of transparency into how ATDs charge for audience buying services
- Few solutions to this but main focus on moving to use services of an independent
- ITDs generally regarded as more transparent (50% satisfied with transparency into how charge for services)
- Most respondents (57%) aware that “arbitrage” (Buying ad spaces at a low price and selling them to media buyer at much higher price) is happening and 82% suspect it influences the impartiality of recommendation.
- The majority (64%) do not accept “arbitrage”, even if receiving improved value compared to „traditional‟ way of trading
- Despite these challenges, 73% of respondents expect trading desk budgets to increase for display media and 66% say the same for online video
- This planned growth is likely driven by the potential for lower CPMs, cited by 65% of respondents, and improved ROI, mentioned by 31%
Here are few more articles that debates the model of agency trading desks. See here and here.