Why Xaxis Needs a Whyaxis

To recap Xaxis has managed to attract opprobrium from all sides including this one for being both a buyer and a seller of digital space the selling bit comes via the merging with fellow GroupM business the ad network 247 So Xaxis buys elements of campaigns for its clients from itselfStatements from Xaxis that a it will not allow any advertiser the right to audit the buys made on their behalf and b that it considers it irrelevant to tell their advertisers what it paid for the space it is now passing on havenamp8217t exactly inspired confidence in the organizationamp8217s transparency The previous Cog Blog post on this is hereFor a group of people who regularly advise their clients on the importance of brand trust the media agency business seems in need of some of its own advice Right now the sectoramp8217s reputation is at a pretty low ebb with accusations of opaque dealing of keeping rebates generated by aggregating their clientsamp8217 budgets and now of a major player refusing advertisers the right either to audit how their money has been spent or indeed to know what was paid for the space or time in the first place This failure to be open and transparent affects the vital component of trust between advertisers and their agencies and when trust starts to evaporate serious problems soon followIn February of this year Bill Duggan Group Executive Vice Presidentamp160at the American advertiser association the ANA wrote amp8220Our business has historically been built on trust and relationships But this transparency crisis is causing trust to break down and ultimately that will affect the relationships marketers have with their agencies and the mediaamp8221In 2012 a World Federation of Advertisers survey of its members found that 88 of respondents agreed with the following statement amp8220Agency fees are falling yet profits continue to rise This demonstrates that advertisers feel that agencies and media owners are being less transparent than everamp8221It could all be so different Operations like Xaxis are no doubt capable of bringing major benefits for which they can quite legitimately and openly charge Furthermore I believe that advertisers if approached in the right way and at the right level will pay for services that demonstrably add valueAmongst these services are data analytic skills and the ability to turn the crude oil that is raw data into the valuable fuel that drives insights and leads to competitive advantage Data skills sit neatly alongside research skills as a crucial input to communications planningSo why subsume these skills within a set of operating principles that are guaranteed to fan the flames that flicker around the sense within many advertisers that the media agencies are basically a bunch of wheeler dealers determined to cheat them at every turn through one means or anotherPrioritizing making money from dealing as opposed to charging clients openly and fairly for the time and the skills deployed on planning and evaluating the results of campaigns is a mistake that many of those who lead the media agencies have made over and over again And here they are making it againThere are quite legitimate reasons why a volume player like GroupM can offer benefits to its clients after all it has plenty of no doubt happy customers But broking space and time from a media owner owned by itself is unwise and could turn out to be the rotten apple that can with time ruin the cropWhen Sir Martin Sorrell announced the purchase of the ad network 247 by WPP in 2007 AdAge reported that analysts amp8220said they were not worried about a conflict of interest in a holding company owning an ad networkamp8221 To be generous maybe 6 or 7 years ago these analysts hadnamp8217t thought through how this might develop Given the scale of those large advertisers recently expressing concern publicly over Xaxisamp8217 stated operating principles some of whom have voted with their feet and gone elsewhere even if still within the GroupM portfolio at least for now they may want to rethink that remarkIt would be smart if those who run Xaxis quietly started a rethink on just what itamp8217s for They need to appreciate that advertisers are increasingly and understandably demanding transparency and full disclosure and yes I do appreciate the difference Consequently thereamp8217s a need to reorganize and reposition the organization around the good bits Itamp8217s time to deliver a WhyaxixThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Why Xaxis Needs a Whyaxis

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Brian Jacobs

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