Aegis figures it out: 'We can't beat Xaxis. Let's copy it'

21 Nov 2016  |  Dominic Mills 
Aegis figures it out: 'We can't beat Xaxis. Let's copy it'

Dentsu Aegis has created a secretive new trading entity - and it goes against the grain in the current push for transparency, writes Dominic Mills

News stories are not the normal remit of this column (been there, done that). But every now and then a gift horse marked 'story' lands in the in-box, and it would be churlish to ignore it.

This particular gift horse takes the form of a presentation - dated, as far as I can tell, from August - launching an entirely new media proposition from Dentsu Aegis in the US.

It's called 'agyle [sic] advantage', all in trendy lower case and with the misspelt 'agyle', which I take to be an utterly wanky spin on 'agile'. It makes you wonder y anyone would come up with such a stupid name.

AA, as I'm going to call it (because I simply can't bring myself to write it out in full), is a creature of mystery. Search online and you can get zip. Search the Denstu Aegis website and there is nothing either. Even its PR people know, or purport to, nothing. I've asked three different ones and they've all come back with nothing.

And yet, despite this apparent vapour trail, it's real. Someone in AA has taken the trouble to put together this proposal and hawk it round US clients.

So what is AA? Well, as far as I can tell it's Xaxis. That is, it's a principal trading entity, aka media broking/arbitrage. You know, the ones where they buy the media upfront at a discount and sell it on to clients at a price, they claim, substantially cheaper than they could otherwise get even after AA has added its various mark-ups.

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The client has not much idea what it is getting inventory-wise, and the market rate at which this stuff might normally be available. But since no price audits are allowed, and no sight of the transaction between AA and the media owner, well...they just have to take it on trust.

Don't get me wrong. The principal trading model is not necessarily a bad thing per se: its USP is that clients get what they would have got anyway, just cheaper. But the client will lack confidence in two things: one, that it is being ripped off on the margin; and two, that somehow the planning process is inverted or subverted in order to justify the media choices.

And in that context, the built-in financial opacity of the principal trading model is clearly going against the grain in the current push for transparency.

So why is Aegis doing this? Without their side of the story, I can only guess that they have seen the success of Xaxis and, less publicly, Omnicom's OMnet and Publicis's Apex principal trading units. Moreover, Wall Street analysts have probably been muttering in Jerry Buhlmann's ear words to the effect of: "Why haven't you got one of these. It'll boost your margins no end."

What is AA promising exactly? Well, for starters it's offering a minimum 5pc savings on like-for-like media. Hmm. That doesn't sound like that much, and anyway 'like-for-like' is a wonderfully imprecise term. In so far as it has four wheels, a few doors and gets you from A to B, a Skoda is like-for-like with a Porsche. But not in any other respect.

It claims "media schedules will maintain the integrity of the media plan", which I take to mean that it won't stuff the client with any old crap just because it bought it dead cheap.

Furthermore, the client's main media agency of record (presumably Carat/Vizeum etc) "stewards with AA as they do with any media vendor on your behalf". Really. I'd like to see that in practice. Can you imagine Carat treating a sister company the way it would, say, Joe Media Supplier?

Finally, on a slide marked "delivers premium inventory", AA lists a whole load of top-drawer US publishers, including NBC, CBS, Turner, Hulu, Quantcast, Yahoo and so on - the implication being it is their inventory AA will be dealing in. This it then spoils by adding a small * 'for illustrative purposes only'.

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There's more, but you get the point. Quite why Dentsu Aegis has chosen to be so secretive about this I can't say. This is not a business where anything stays secret for long, and anyway it's only playing catch-up.

So there we have it. It may be that AA has just been a kite-flying exercise that has failed to gain traction. But I can't see why. If everybody else has an AA, Dentsu-Aegis should have one too.

Out with the old, in with the, er, less old

Courtesy of AMV BBDO, the Advertising Association threw a lovely party last week for outgoing Advertising Association boss Tim Lefroy. A man of great energy, commitment and accumulated wisdom, he is a loss to the industry.

One of the highlights was an appearance by Gio Compario, singing a few of his, er greatest hits, although thankfully without his hideous hair and moustache.

Lefroy is replaced by the equally wise (and almost as experienced) Stephen Woodford, former president of the IPA and a stalwart of, among other agencies, Leo Burnett, Engine and DDB.

That was the same week that the ISBA announced that Mike Hughes would be replaced at the helm by Phil Smith, the former Kraft (as was) and Camelot marketer. That feels like a real coup to me.

A few weeks ago ABC announced that its new chair, taking over from former Hello! publisher Sally Cartwright, would be none other than Publicis Media stalwart Derek Morris.

Collectively these appointments made me realise how lucky the UK industry is to be able to call on people of this stature for these unglamorous, often thankless, but nonetheless important tasks. They are serious people doing serious business for the industry, and we ought to be thankful there are sufficient numbers willing and able to step forward.

The IAB's Guy Phillipson is also leaving, meaning there is another big job to be filled there, and over at Newsworks we wait to see whether Vanessa Clifford, the interim CEO, will step up the job many people in the industry think she deserves. Either way, you can bet those roles will be taken by proper people.

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