Will GroupM exit Open Ad Exchanges in Latin America? Not for now….
Earlier this year, Group M announced that by the end of this year it will exit Open Ad Exchanges to buy digital media when it trades on behalf of its clients. The big question is whether this is also valid for Latin America. Is it even possible to shun open ad exchanges when buying digital media in Latin America? Whether GroupM is going to be able to really avoid open ad exchanges in the region is going to be followed closely by other agencies and clients. Below is what we found out.
As an increasing amount of clients (e.g. Mondelez, Mondelez, Heineken, Kimberly, Kellogg’s, Amex) want direct control over exchange traded platforms, agencies, most notoriously Group M, are trying to avoid open ad exchanges. Portada asked Ari Bluman, Chief Digital Investment Officer at Group M in New York. "I speak for North America, but the rest of the globe will certainly follow when publisher technology improves to allow any and all brands to execute private deals," Bluman said. Bluman did say that "North America in GroupM's structure is US and Canada. Mexico is part of our Latam organization and run by David Posada."
So what does Bogota Colombia based, David Posada,Managing Director Interaction GroupM Latin America say? Will open exchanges be exited by GroupM also in Latin America by year-end? "Not yet, we are aligned with GroupM global strategy, but we have to take the Latin American context into account, where programmatic buying is only starting. That is why a better understanding of the digital ecosystem by the publishers is needed so they see programmatic as an additional way to market their inventory as opposed to something that cannibalizes their revenues. We are quickly adding private agreements but we expect to continue using open exchanges for some time until we have enough inventory in our own market place."
Not yet, we are aligned with GroupM global strategy, but we have to take the Latin American context into account
The Key Role of Publisher Education and Engagement
"My team and I are meeting with 30-40 publishers a week to lock these deals down, it is fast and furious, but brands are excited about this evolution as well as the publishing community.We are doing deals with any and all publishers that match the content and audiences that our brands seek, regardless of massive scale of that publisher. Example being in the B2B verticals, sites are niche, audiences aren’t enormous, but they are quite valuable to many of our brands," says GroupM's Ari Bluman.
"During the initial phase publishers adopt the view that here is my inventory and this is the rate that I need, which is fine, but in order to grow the revenue stream they have to be open to working with all their portfolio of products and inventory, says Jay Sears Senior Vice President, Marketplace Development at the Rubicon Project, who was interviewed at last week's Festival of Media Latin America in Miami. :"One of our biggest challenges is educating the market, especially on first party data, the value of it and how to monetize it." Really few understand what they have in their data and how valuable it is.Sears adds that the Rubicon Project has targeted two regions for its next expansion: Latin America and Asia, "that is why we opened offices in Miami, Sao Paolo and Hong Kong."
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Asked how the outreach for direct agreements with publishers is working in Latin America, Posada notes that GroupM is starting with pure Internet players which have a regional presence. After that he plans to reach out to local players that have a local relevance in each of the markets such as the digital platforms of traditional media groups. Also smaller niche publishers should be interested in Programmatic according to Posada. We don't understand programmatic buying as a way to buy inventory in an automatic way and at low prices, but as a way to reach audiences through the use of data. Our value proposition starts with this prerogative and it is as valid for the long tail as for the mainstream media properties.
The role of Xaxis
Regarding the role of Xaxis, Posada notes that it " is our programmatic trading platform with presence in Miami, Mexico, Argentina, Colombia and Brazil. The majority of efforts to build our Private Market Platform (PMP) are being conducted through Xaxis. In addition, our Data Management Platform (DMP) Turbine launched earlier this year already has rich data and information to better segment our campaigns in the region."